SEC Charges Clinical Trial Consultant with Insider Trading
June 27, 2022
File No. 3-20910
June 27, 2022 - The Securities and Exchange Commission today announced settled charges against Sidney A. Spector, MD, PhD, who learned of a confidential, adverse development while consulting on a biotechnology company's clinical trial and then subsequently sold his stock in that company and persuaded a close relative to do the same.
According to the SEC's order, in November 2019, Spector learned confidential information that a patient in a clinical trial experienced a serious adverse event that had been deemed related to the study drug developed by Solid Biosciences, Inc. The SEC's order finds that this serious adverse event raised the likelihood that the U.S. Food and Drug Administration would place a hold on the clinical trial, especially since such a hold followed another, earlier serious adverse event in Solid Biosciences' clinical trial. As set forth in the order, Spector then breached his duty of trust and confidence to Solid Biosciences and its shareholders, and sold his stock in the company and also convinced a close relative to sell the company's stock. The SEC's order further finds that Spector and his relative avoided losses of $28,142.33 and $2,351.89, respectively, by selling before Solid Biosciences announced on November 12, 2019 that the FDA had imposed a clinical hold on the trial and its stock price ended trading 74.4% below the prior day's closing price.
The SEC's order finds that Spector violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Without admitting or denying the SEC's findings, Spector agreed to a cease-and-desist order, and to pay disgorgement of $28,142.33, prejudgment interest of $2,381.44, and a civil penalty of $33,045.14.
The SEC's investigation was conducted by Emily Shea and Timothy Work, and supervised by Kevin Guerrero and Stacy Bogert. The investigative team appreciates the assistance of the Financial Industry Regulatory Authority.