SEC Announces Additional Charges in Scheme to Trade Ahead of Pharma Tender Offer
Litigation Release No. 25576 / November 10, 2022
Securities and Exchange Commission v. Brian Wong, No. 22-cv-09618 (S.D.N.Y. filed November 10, 2022)
On November 10, 2022, the Securities and Exchange Commission filed insider trading charges against Brian Wong of Secaucus, New Jersey for trading on inside information tipped to him by his brother, Brandon Wong. The SEC previously charged Brandon Wong and his source, Seth Markin, with insider trading on July 25, 2022.
According to the SEC’s complaint, filed in federal district court in Manhattan, Brian Wong made approximately $400,000 from illegally trading ahead of a February 2021 announcement of a tender offer by Merck & Co., Inc. to acquire Pandion Therapeutics, Inc. The SEC’s complaint alleges that Brian Wong’s brother, Brandon Wong, unlawfully communicated material nonpublic information about Merck’s impending acquisition of Pandion to Brian Wong before the February 2021 announcement, and that Brian Wong purchased Pandion stock based on that information. As previously alleged in the SEC’s July 25, 2022 complaint, Brandon Wong had been tipped about the impending acquisition by his friend Seth Markin, who had misappropriated the information from Markin’s romantic partner, an attorney working on the deal.
The SEC’s complaint charges Brian Wong with violations of the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and of Exchange Act Rules 10b-5 and 14e-3 and seeks injunctive relief, disgorgement with prejudgment interest, and civil monetary penalties. Subject to court approval, Brian Wong has consented to the entry of injunctive relief, with monetary remedies to be determined at a later date, upon a motion by the SEC.
The case originated from the SEC Enforcement Division’s Market Abuse Unit Analysis and Detection Center, which uses data analysis tools to detect suspicious trading patterns.
In a related action, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Brian Wong.
The SEC’s investigation, which is continuing, was conducted by Tracy Sivitz, Chevon Walker, John Rymas, and Simona Suh of the Market Abuse Unit, and by Neil Hendelman of the New York Regional Office. This case has been supervised by Market Abuse Unit Chief Joseph G. Sansone. Mses. Sivitz, Walker, and Suh will lead the SEC’s litigation. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Department of Justice, and the Financial Industry Regulatory Authority.