Federal prosecutors have charged a Bristol-Myers Squibb executive with insider trading, saying he had profited from confidential information about pending deals by the pharmaceutical company.
Robert D. Ramnarine, the executive, was accused of buying call options in ZymoGenetics, Pharmasset and Amylin Pharmaceuticals before the companies were acquired by Bristol-Myers Squibb. Call options give their buyer the right to buy a stock from their seller at a specific price and time. Mr. Ramnarine sold the options and made more than $300,000 on the illegal trades, according to the complaint filed in Federal District Court in Newark.
Mr. Ramnarine, who lives in East Brunswick, N.J., was arrested on Thursday morning and appeared in court in the afternoon. He did not enter a plea and was released on bail into his wife’s custody.
His lawyer, Peter Carter, a court-appointed federal public defender, could not immediately be reached for comment.
The case comes amid a broader crackdown by the federal government on insider trading. The United States attorney’s office in Manhattan has won a number of major cases against big investors, corporate executives and others. Those include recent victories against Raj Rajaratnam, the billionaire hedge fund manager who founded the Galleon Group, and Rajat K.Gupta, the retired head of the consulting firm McKinsey Company and a former director at Goldman Sachs.
In the case of the Bristol-Myers executive, investigators identified a pattern to the trades, which took place from 2010 to 2012, according to a complaint. Mr. Ramnarine, an assistant director of capital markets at Bristol-Myers, bought call options through personal brokerage accounts, it said. After the deals were announced, he collected the profit on those positions, the complaint said.
Mr. Ramnarie apparently had some apprehensions. According to the complaint, he searched the Internet last year for the terms “can stock option be traced to purchase inside trading,” and “insider trading options trace illegal.” The court document also says he viewed an article on the blog Zero Hedge about insider trading in options of Ann Taylor.
The Securities and Exchange Commission has filed a civil action against Mr. Ramnarine. The agency is seeking a court order to freeze the executive’s brokerage account assets.
“Ramnarine tried to educate himself about how the S.E.C. investigates insider trading so he could avoid detection, but apparently he ignored countless successful S.E.C. enforcement actions against similarly ill-motivated individuals who paid a heavy price for their illegal trading,” said Daniel M. Hawke, the chief of the enforcement division’s market abuse unit.
United States v. Robert Ramnarine
Securities and Exchange Commission v. Robert Ramnarine
Article source: http://dealbook.nytimes.com/2012/08/02/bristol-myers-executive-accused-of-insider-trading/?partner=rss&emc=rss