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U.S. Securities and Exchange Commission


Litigation Release No. 22717 / June 7, 2013

Securities and Exchange Commission v. Bruce W. Tomlinson, Civil Action No. CV 13-2549 (RWW) (N.D. Cal.)

SEC Charges Former Officer of Intermune, Inc. with Insider Trading

On June 6, 2013, the Securities and Exchange Commission charged Bruce W. Tomlinson, the former vice president of finance, principal accounting officer, and controller of InterMune, Inc., a pharmaceutical company based in Brisbane, California, with having tipped his friend and former business associate, Michael Sarkesian, about material nonpublic information concerning the progress of InterMune’s application before a European Union regulatory body to market its drug Esbriet in the EU.

According to the Commission’s complaint filed in the U.S. District Court in the Northern District of California, in March 2010, InterMune submitted its marketing application to the European Medicines Agency. The complaint further alleges that an EMA advisory subcommittee, the Committee for Medicinal Products for Human Use ("CHMP"), began assessing the application and communicating with InterMune. By mid-November 2010, in the course of his employment, Tomlinson allegedly had become privy to material non-public information about the increasing probability that the CHMP would render a positive opinion and faster than had been publicly anticipated by InterMune. The complaint alleges that on November 17, 2010, Tomlinson emailed Sarkesian that, amongst other things, the European regulatory review process appeared "to be moving faster and better" than anticipated and that this impacted on "Company wide strategic decisions." On the basis of that information, Sarkesian allegedly directed the purchase of 400 out-of-the-money call options on InterMune common stock through a brokerage account held in the name of Quorne Limited in advance of a December 17, 2010 announcement that the CHMP had rendered a positive opinion. The price of the options increased over 500% on the news, resulting in $616,000 in alleged imputed profits.

Without admitting or denying the allegations of the complaint, Tomlinson has consented to entry of a final judgment permanently enjoining him from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, prohibiting him from serving as an officer or director of a public company for a period of five years, and ordering him to pay a civil penalty of $616,000. Based on the anticipated entry of a final judgment, Tomlinson has also consented to the issuance of an order in a separate administrative proceeding pursuant to which he would be suspended under Rule 102(e)(3) of the Commission’s Rules of Practice from appearing or practicing before the Commission as an accountant with a right to apply for reinstatement after five years.

A consent judgment was previously entered against Sarkesian and Quorne Limited pursuant to which, amongst other things, the defendants, without admitting or denying the Commission’s allegations, were ordered to disgorge $616,000. SEC v. Quorne Limited and Michael Sarkesian, 10-cv-9560 (GBD) (S.D.N.Y)/Lit. Rel. No. 22312 (March 30, 2012).

The Commission acknowledges the assistance of the Options Regulatory Surveillance Authority, the Swiss Financial Market Supervisory Authority, the Cyprus Securities and Exchange Commission, and the British Virgin Islands Financial Services Commission.

The Commission's investigation is continuing.



Modified: 06/07/2013