Bristol-Myers Executive Charged with Insider Trading

A Bristol-Myers

executive was charged with insider trading Thursday. According to authorities, Robert Ramnarine is charged with buying options in three different companies that Bristol-Myers was trying to acquire. It is illegal to use non-public information for personal gain. On three different occasions, spanning from 2010 to 2012, Ramnarine bought options on information that Bristol-Myers was taking over other pharmaceuticals companies. After the takeovers were announced, Ramnarine would sell the options and cash in a profit for himself. Ramnarine made more than $300,000 dollars in illegal profits from stock option trading, according to authorities. Specifically, he made trades on a personal account for the following three companies Bristol-Myers was trying to acquire: Amylin Pharmaceuticals

, Zymogenetics, and Pharmasset. Prior to Bristol-Myers' September 7, 2010 Zymogenetics acquisition announcement, Ramnarine made $30,551 by trading call options of the target firm. In addition, he made $225,026 after selling calls of Pharmasset right after the public announcement of its sale. Then in 2012, Ramnarine made $55,784 in illegal profits by trading put and call options prior to Amylin's sale announcement. All of these purchases were made on non-public information, which he received from Bristol-Myers. The executive faces three different securities fraud counts. Each of these counts carries a maximum penalty of 30 years in prison and a fine of up to $5 million. The SEC has filed three separate civil fraud charges against Ramnarine and is looking to freeze his brokerage account. Apparently, Ramnarine was skeptical about making the illegal trades. Ramnarine made Internet searches that included the phrase “can options be traced to buyer” and “illegal insider trading options trace,” according an SEC statement. He also viewed an article from the SEC website about enforcement on insider trading prior to an acquisition announcement. “Ramnarine tried to educate himself about how the SEC investigates insider trading so he could avoid detection, but apparently he ignored countless successful SEC enforcement actions against similarly ill-motivated individuals who paid a heavy price for their illegal trading," said Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit, in an statement Thursday morning, Ramnarine was arrested and taken into custody. He was set to report in court later on Thursday in New Jersey. Seperately, Bristol-Myers suspended a treatment for hepatitis C Thursday because of cardiac concerns. One patient, who was being treated with the drug, suffered heart failure. Bristol-Myers said it has not determined if the drug caused the heart failure, but that the firm is examining all patients. Thursday afternoon, Bristol-Myers traded down around 8 percent.