Federal Authorities Charge Former Pfizer Employee and Friend with Insider Trading

Federal authorities have charged a former Pfizer employee and his close friend with illegally trading shares based on non-public trial results of Pfizer’s Covid antiviral pill, Paxlovid. The charges were announced by both the Justice Department and the Securities and Exchange Commission.

The Accused and Their Actions

The accused individuals are Amit Dagar, a former senior statistical programming lead at Pfizer, and his friend Atul Bhiwapurkar. Dagar, who had access to and analyzed Paxlovid clinical trial data, and Bhiwapurkar were involved in an insider trading scheme to make profits from options trading based on inside information. They sold their Pfizer call options and made over $350,000 in illicit profits.

Legal Consequences

Amit Dagar, 44, was arrested and charged with four counts of securities fraud, each carrying a maximum prison sentence of 20 years. He was also charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years. Atul Bhiwapurkar, 45, was also arrested and charged with two counts of securities fraud and one count of conspiracy to commit securities fraud.

Response from Pfizer

A spokesperson from Pfizer stated that the charges in this case pertain to the personal conduct of a former employee in violation of the company’s policies. Pfizer is cooperating with the government’s investigation.

Details of the Insider Trading

On November 4, 2021, Dagar learned the positive results of the Paxlovid trial before they were made public. This information was shared with Dagar’s supervisor through a chat conversation. Dagar then purchased Pfizer call options, and shortly after, he shared the results with Bhiwapurkar. Pfizer’s stock price surged nearly 11% after the release of the Paxlovid data on November 5.

Financial Gain and Consequences

Dagar generated a one-day profit of approximately $214,395 from his $8,380 investment in Pfizer call options, representing a return of 2,458%. Bhiwapurkar made a one-day profit of approximately $60,300 from his $7,400 investment. Another individual, who was tipped off by Bhiwapurkar, made a one-day profit of approximately $29,770.

Official Statements

“As alleged in our complaint, Amit Dagar misused his access to confidential clinical trial results to enrich himself and his friend, Atul Bhiwapurkar,” said Joseph Sansone, chief of the SEC’s Market Abuse Unit. “Dagar and Bhiwapurkar allegedly leveraged this information by trading out-of-the-money call options to generate massive one-day returns. Thanks to our surveillance, the defendants must now face the consequences of their greed.”