The Securities and Exchange Commission today charged Sepehr Sarshar, a founder and former board member of Auspex Pharmaceuticals, Inc., with insider trading ahead of Teva Pharmaceuticals' acquisition of Auspex in 2015.

According to the SEC's complaint, in early 2015, Sarshar, then an Auspex board member, learned that Teva was interested in acquiring Auspex through a tender offer. The complaint alleges that, after Auspex's board and management had taken active steps to facilitate the sale of the company, Sarshar communicated material non-public information regarding the highly confidential tender offer process to numerous friends and family and caused them to trade in Auspex stock ahead of the tender offer announcement. As alleged in the SEC's complaint, as a result of Sarshar's actions, his friends and family realized ill-gotten gains of at least $300,000.

The SEC's complaint, filed in the United States District Court for the Southern District of New York, charges Sarshar with violating the tender offer provisions of Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder and seeks permanent injunctive relief and a civil penalty.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Sarshar.

The SEC's investigation was conducted by Megan Ryan and supervised by Scott A. Thompson and Kelly L. Gibson, of the SEC's Philadelphia Regional Office. The litigation will be led by Mark R. Sylvester and Jennifer C. Barry. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.