Bristol-Myers Executive Charged with Insider Trading
A Bristol-Myers Squibb executive has been criminally charged with insider trading, accused of buying options in three companies that the drugmaker was looking to buy.
Prosecutors said Robert Ramnarine, 45, made about $311,361 in illegal profit between August 2010 and July 2012 by buying call options in ZymoGenetics and Pharmasset and call and put options in Amylin Pharmaceuticals, shortly before those pharmaceutical companies agreed to takeovers.
Ramnarine, who was promoted in July to assistant treasurer for capital markets, was charged with three counts of securities fraud, according to a complaint made public on Thursday in the federal court in Newark, New Jersey. Each count carries a maximum penalty of 20 years in prison and a $5 million fine.
The U.S. Securities and Exchange Commission filed separate civil fraud charges against Ramnarine, and seeks both to recover illegal profit and to freeze the East Brunswick, New Jersey, resident's brokerage account assets.
Ken Dominski, a Bristol-Myers spokesman, said the New York-based company is cooperating with the government and has put Ramnarine on administrative leave. "Bristol-Myers Squibb has clear and strict policies prohibiting trading on material non-public information," he said.
Ramnarine was arrested Thursday morning and is expected to appear in federal court later in the day, said a spokesman for U.S. Attorney Paul Fishman in New Jersey. It is unclear whether Ramnarine has hired a lawyer for his defense.
According to the complaint, Ramnarine learned confidential information about potential takeovers while working as a director or executive director in Bristol-Myers' pension and savings investments office in Princeton, New Jersey.
The complaint said that before buying the Pharmasset options, Ramnarine conducted several Internet searches on Yahoo from his office concerning detection of insider trading.
These searches included "can option be traced to purchaser" and "insider trading options trace illegal (sic)," and included a review of an August 2005 SEC press release over alleged insider trading in Reebok International call options.
Bristol-Myers bought ZymoGenetics for $885 million in October 2010. It expects to complete its $5.3 billion purchase of Amylin this month.
Gilead Sciences agreed in November to buy Pharmasset after Bristol-Myers dropped out of talks. Gilead completed the $11 billion acquisition in January.
The case is U.S. v. Ramnarine, U.S. District Court, District of New Jersey, No. 12-md-08121.
