Usama Malik, the former chief financial officer of Morris Plains-based Immunomedics, has admitted his role in an insider trading scheme.
U.S. Attorney for New Jersey Philip Sellinger announced May 17 that the 48-year-old Malik pleaded guilty before U.S. District Judge John Michael Vazquez in Newark to one count of an indictment charging him with securities fraud/insider trading.
From 2018 through October 2020, Malik served as the CFO of the Morris Plains-based company that was acquired by Gilead for $21 billion. That acquisition was completed in October 2020.
Prosecutors say that in April 2020, the biopharmaceutical company announced for the first time that its breast cancer drug had proven effective in pre-market clinical trials, and that Malik was among the first, and one of just a few, employees who received material non-public information about the drug before the wider announcement.
“Within minutes of obtaining that information, Malik passed it along to Lauren S. Wood, 34, also of Washington, D.C. Wood lived with Malik at the time and was formerly employed by the same company as him,” said prosecutors, according to court documents and statements. “Before April 6, 2020, and within hours of receiving the insider information from Malik, Wood placed an order for approximately 7,000 shares of the company’s stock, despite the fact that during the same time period the company’s stock was downgraded by financial experts. After the company announced that its cancer drug had proven effective in pre-market clinical trials, its stock price increased. After selling her shares, Wood realized a significant profit.”
Last June, Wood pleaded guilty to a charge of securities fraud/insider trading and is scheduled to be sentenced Dec. 18, 2023.
The charge Malik pleaded guilty to is punishable by up to 20 years in prison and a maximum fine of $5 million. He is scheduled to be sentenced Sept. 18, 2023.