The former CFO of a Morris Plains pharmaceutical company admitted he conspired with his romantic partner to purchase 7,000 shares of his own company, acting on private information about a breast cancer treatment his business developed, which netted the couple nearly $250,000 in the illicit stock trade, according to his indictment and federal sources.
Usama Malik, 48, of Washington, D.C., pleaded guilty to insider trading and securities fraud in Newark federal court Wednesday, admitting he compelled his then-girlfriend, Lauren Wood, and family members to purchase the shares after clinical trials for the treatment proved promising, using his loved ones as workarounds to make profitable investments during what's known as a "blackout," when employees are precluded from trading on privileged knowledge that could affect a business's value.
Not only did Malik act on the trials' results in April 2020, but six months later, the company, Immunomedics Inc., was acquired in a $21 billion deal, according to federal authorities. All told, Malik and Wood netted themselves $213,618 in the illicit trade, the indictment says.
Malik could face up to 20 years in federal prison and a maximum fine of $5 million upon his sentencing, which is scheduled for Sept. 18.
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Wood pleaded guilty in June to the same charges, and she is scheduled to be sentenced Dec. 18.
Both co-defendants were also hit with violations by the U.S. Securities and Exchanges Commission on Dec. 2, 2021. However, a spokesperson from the commission said Thursday that the agency's case against the two has been on hold pending results of the Justice Department trial.
This article originally appeared on NorthJersey.com: Pharma CFO admits he used cancer med info to net $200K in stock trade