U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23871 / June 30, 2017
Securities and Exchange Commission v. Sasan Sabrdaran and Farhang Afsarpour, Civil Action No. 3:14-cv-4825 (N.D. Cal.) (filed October 31, 2014)
Court Enters Final Judgment Against Former Pharmaceutical Company Executive and Friend For Insider Trading
The Securities and Exchange Commission today announced that the Honorable Jacqueline Scott Corley, U.S. Magistrate Judge for the Northern District of California, entered a final judgment as to Sasan Sabrdaran, the former director of drug safety risk management at Brisbane, California-based InterMune, Inc., and his long-time friend, Farhang Afsarpour. The final judgment orders payment of disgorgement and prejudgment interest and imposes an officer and director bar following a jury verdict that found both defendants had engaged in insider trading.
As shown at trial, Sabrdaran tipped Afsarpour in 2010 with confidential details while Sabrdaran was involved with shepherding InterMune's application before a European Union regulatory body to market an InterMune drug called Esbriet to be used for the treatment of patients with a type of fatal lung disease. Afsarpour then acted on that tip by purchasing InterMune common stock on a U.S. stock exchange through his U.S.-based stockbroker and by purchasing spread bets on the future price movement in InterMune common stock or options through a U.K-based spread-betting firm. Afsarpour also tipped friends who gave him money with which he purchased certain of the spread bets through his account or who purchased InterMune common stock, options, or spread bets through their own accounts.
On November 14, 2016, a jury returned a verdict in favor of the SEC and against Sabrdaran and Afsarpour. Sabrdaran and Afsarpour were found liable for insider trading in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b).
The Court's final judgment, entered June 15, 2017, orders Afsarpour to pay $386,671.99 in disgorgement, of which Sabrdaran is jointly and severally liable for payment of up to $288,968.19, and orders Afsarpour to pay $69,919.93 in prejudgment interest. The final judgment also bars Sabrdaran from acting as an officer or director of any SEC-reporting company. In finding Sabrdaran unfit to serve as an officer of director, the Court observed that "[t]ime and time again, when faced with difficult questions, Dr. Sabrdaran declined to tell the truth" and that "over the course of the SEC's investigation and during trial" he "engage[d] in dishonest misconduct."
This concludes the SEC's federal district court litigation.
Kenneth W. Donnelly and James E. Smith, under the supervision of Frederick L. Block, led the SEC's litigation with the assistance of Drew Panahi, who conducted the underlying investigation, and Victor Tabak.