U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23868 / June 27, 2017
Securities and Exchange Commission v. Harold L. Altvater, Civil Action No. 17-cv-11178 (D. Mass. filed June 27, 2017)
Securities and Exchange Commission v. Maureen E. Curran, Civil Action No. 7-cv-11179 (D. Mass. filed June 27, 2017)
Securities and Exchange Commission v. Susan L. Dubuc, Civil Action No. 17-cv-11180 (D. Mass. filed June 27, 2017)
SEC Charges Three with Insider Trading in Stock of Ariad Pharmaceuticals, Inc.
The Securities and Exchange Commission today announced insider trading charges against two former senior employees and the spouse of a former employee of Ariad Pharmaceuticals, Inc., a company based in Cambridge, Massachusetts engaged in the business of developing and marketing drugs to treat cancer.
According to the SEC’s complaints, filed in federal court in Boston, Massachusetts, the defendants traded in Ariad’s stock in advance of announcements about U.S. Food and Drug Administration (FDA) decisions that impacted the sales and marketing of the company’s main product. Additionally, the SEC’s complaints allege that:
- Harold Altvater, whose wife was an Ariad employee, illegally traded Ariad stock on the basis of non-public information he learned from her. On three occasions between October 2013 and January 2014, Altvater traded in advance of company announcements about the safety profile and FDA approval status of Ariad’s only FDA-approved drug. Altvater traded in Ariad stock shortly after his wife learned material non-public information regarding Ariad’s ongoing dealings with the FDA. By purchasing shares ahead of a positive announcement, and selling shares ahead of negative announcements, Altvater avoided losses and obtained insider profits totaling $102,026.30. Altvater also advised a friend to trade Ariad stock on the basis of non-public information learned from Altvater’s wife, enabling the friend to obtain profits of $4,188.
- Maureen Curran, Ariad’s former Senior Director of Pharmacovigilance and Risk Management, sold Ariad stock in December 2012, after she had attended meetings with the FDA and had learned material nonpublic information regarding a forthcoming FDA decision to require Ariad to include a safety warning on its product label. Ariad’s insider trading policy expressly prohibited employees from trading while in possession of material nonpublic information. After Ariad announced the FDA decision on December 14, 2012, its stock price declined significantly. By selling in advance of Ariad’s announcement, Curran avoided $9,420 in losses.
- Susan Dubuc, Ariad’s former Associate Director of Pharmacovigilance and Risk Management, alerted certain of her relatives in October 2013, one day before Ariad publicly announced a pause in all clinical trials for its FDA-approved drug. Prior to tipping her relatives, Dubuc had received a “blackout notice” from Ariad’s Chief Financial Officer which prohibited all employees and their family members from trading in Ariad’s stock. After Ariad announced the pause in clinical trials on October 9, 2013, its stock price declined significantly. By selling in advance of Ariad’s announcement, Dubuc’s relatives avoided $2,888.10 in losses.
The SEC’s complaints each charge Altvater, Curran, and Dubuc with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties in its complaint against Altvater. Without admitting or denying the SEC’s allegations, Curran and Dubuc have consented to the entry of final judgments that would permanently enjoin them from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment against Curran will require her to pay disgorgement of $9,420, prejudgment interest of $1,408.58, and a civil penalty of $9,420. The judgment against Dubuc will require her to pay disgorgement of $2,888.10, prejudgment interest of $310.48, and a civil penalty of $2,888.10. The settlements with Curran and Dubuc are subject to court approval.
The SEC’s action is being handled by Michael Vito, Deena Bernstein, and Celia Moore in the Boston Regional Office.