Litigation Release No. 23662 / September 29, 2016

Securities and Exchange Commission v. Robert Gadimian, Civil Action No. 1:16-cv-11955 (D. Mass. filed Sept. 29, 2016)

Biotech Employee Charged with Insider Trading Ahead of Company's Announcements About Breast Cancer Drug

Washington, D.C., Sept. 29, 2016 - The Securities and Exchange Commission today charged the former senior director of regulatory affairs for Puma Biotechnology with insider trading ahead of the company's news announcements about a drug to treat breast cancer.

The SEC alleges that Robert Gadimian pocketed more than $1.1 million in illicit profits by secretly purchasing Puma stock and short-term call options based on nonpublic information he learned about positive developments in two clinical trials for Puma's drug, neratinib. Gadimian allegedly bought Puma securities before the results from the first trial were announced in December 2013, and again before the results of the second trial were announced in July 2014.

According to the SEC's complaint, Puma confronted Gadimian after learning about his trades and he admitted to trading because of "greed." Gadimian allegedly proceeded to alter his trading records before providing them to Puma for its internal investigation, deleting certain trades in Puma securities and renumbering the pages of the altered documents to hide his changes. Gadimian was fired in October 2014.

In a parallel case, the U.S. Attorney's Office for the District of Massachusetts today announced criminal charges against Gadimian.

The SEC's complaint, filed in federal court in Massachusetts, charges Gadimian with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The SEC's investigation was conducted by Timothy K. Halloran with assistance from Martin L. Zerwitz and Michael C. Baker of the Market Abuse Unit. The case was supervised by Deborah A. Tarasevich, Ms. Chion, and Robert A. Cohen, Co-Chief of the Market Abuse Unit. The litigation will be conducted by Jonathan P. Hooks and Mr. Halloran. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

SEC Complaint