SEC Obtains Judgments Against Insider Trading Ring Defendants
Litigation Release No. 24498 / June 11. 2019
Securities and Exchange Commission v. Steven Fishoff, et a, , 18 cv 07685 (S.D.N.Y.)
The United States District Court for the Southern District of New York has entered consent judgments against defendants Winson Tang and Deshan Govender, who were charged by the SEC in August 2018 with insider trading violations in connection with the announcement of a licensing agreement between two large pharmaceutical companies, Sangamo BioSciences Inc. and Biogen Idec Inc.
The SEC's complaint alleges that Tang, who was then a Vice President of Clinical Research for Sangamo and a close friend and business associate of Govender, tipped Govender about confidential licensing agreement negotiations. According to the complaint, Govender then tipped defendant Steven Fishoff and members of Fishoff's insider-trading ring, and Fishoff tipped others who traded. The complaint alleges that Fishoff and the individuals that Fishoff and Govender tipped purchased Sangamo stock and options before the deal with Biogen was announced in January 2014, ultimately making a total of approximately $1.5 million in illegal profits. According to the complaint, Fishoff paid Govender approximately $222,000 for the information.
The judgment against Tang, to which he consented without admitting or denying the allegations in the complaint, was entered on June 3, 2019 and fully resolves the case against him. The final judgment permanently enjoins Tang from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The judgment also imposes a civil monetary penalty in the amount of $750,000 and a five-year officer and director bar against Tang. The judgment against Govender, to which he also consented without admitting or denying the allegations in the complaint, was entered on June 4, 2019 and permanently enjoins him from violating the same antifraud provisions of the Exchange Act. The court will determine the issue of monetary relief as to Govender, on a motion by the SEC. The SEC's insider trading claims against Fishoff and the other defendants in this action remain pending.
In related actions filed in 2015 and 2017, the SEC and the U.S. Attorney's Office for the District of New Jersey charged Fishoff and four members of his group, Paul Petrello, Ronald Chernin, Steven Costantin and Joseph Spera, with illegal insider trading ahead of secondary public stock offerings. Fishoff and the others have pled guilty to the criminal charges. Other than Fishoff, each of them agreed to a partial settlement with the SEC, including for conduct related to trading in advance of the Sangamo-Biogen license agreement, with potential monetary sanctions to be determined at a later date. The SEC action against Fishoff in the District of New Jersey is continuing.
The SEC is represented by Todd Brody, David Austin, Chevon Walker, and George Stepaniuk, and the case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, and the Options Regulatory Surveillance Authority.