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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23889 / July 28, 2017

Securities and Exchange Commission v. Harold L. Altvater, No. 17-cv-11178 (D. Mass. filed June 27, 2017)

USA v. Harold L. Altvater, No. 17-cr-10216 (D. Mass. filed July 20, 2017)

Boston-Area Defendant in SEC Insider Trading Case Faces Criminal Charges

On July 20, 2017, Harold L. Altvater, a defendant in a pending SEC action, was indicted for insider trading in the stock of Cambridge-based Ariad Pharmaceuticals, Inc. based on non-public information he received from his wife, an Ariad employee at the time.

The criminal charges arise from the same conduct alleged in the SEC's complaint against Altvater in a civil action filed on June 27, 2017. The SEC alleges that that Altvater traded in Ariad's stock in advance of announcements about U.S. Food and Drug Administration (FDA) decisions that affected the sales and marketing of the company's main product, a drug to treat cancer. According to the SEC's complaint, Altvater illegally traded Ariad stock on the basis of material non-public information he misappropriated from his wife, an Ariad employee. On three occasions between October 2013 and January 2014, Altvater allegedly traded in advance of company announcements about the safety profile and FDA approval status of Ariad's only FDA-approved drug. The SEC's complaint alleged that Altvater traded in Ariad stock shortly after his wife learned material non-public information regarding Ariad's ongoing dealings with the FDA. By purchasing shares ahead of a positive announcement, and selling shares ahead of negative announcements, Altvater allegedly obtained insider profits and avoided losses totaling $102,026.30. The SEC's complaint alleged that Altvater also advised a friend to trade Ariad stock on the basis of the material non-public information Altvater misappropriated from his wife, enabling the friend to obtain profits of approximately $4,188.

The SEC's action, which is pending, seeks an injunction, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.

 

https://www.sec.gov/litigation/litreleases/2017/lr23889.htm


Modified: 07/28/2017