SEC Charges Scientist for Insider Trading
Litigation Release No. 24221 / August 1, 2018
Securities and Exchange Commission v. Madan, No. 2:18-cv-01121 (W.D. Wa. Seattle Division filed July 31, 2018)
A scientist at Laboratory Corporation of America Holding ("LabCorp") has agreed to settle charges that he engaged in insider trading after learning that his company was about to acquire Sequenom, Inc. ("Sequenom") in a July 2016 tender offer.
The SEC's complaint alleges that Anup Madan, a principal scientist with LabCorp's Covance Genomics Laboratory, learned of the pending acquisition when he conducted a due diligence related site visit to Sequenom's San Diego facilities. Over the next two trading days, Madan purchased 9,300 shares of Sequenom stock despite having signed a company insider trading policy that prohibited trading based upon confidential information that he acquired in the course of performing his job duties. On the date of the public announcement, Sequenom's stock price increased 176%, allowing Madan to sell his shares that same day for a profit of over $14,000.
Without admitting or denying the allegations, Madan agreed to the entry of a final judgment permanently enjoining him from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Madan will disgorge his ill-gotten gains and pay a penalty of $14,023, which is equal to the disgorgement amount.
The SEC's investigation was conducted by Adrienne Gurley and supervised by Marc Blau. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.