In a stunning verdict that sends a clear message to corporate America, former Pfizer employee Amit Dagar was convicted on Thursday of insider trading. This case highlights the ongoing battle against corruption in financial markets and serves as a cautionary tale for those in positions of trust and access to sensitive information.
A federal jury in Manhattan found Dagar, 44, of Hillsborough, New Jersey, guilty of securities fraud. The conviction stems from Dagar’s illegal use of confidential information about Pfizer’s COVID antiviral drug, Paxlovid. This information was not just privileged — it was a cornerstone of trust in the pharmaceutical industry’s role in combating the COVID-19 pandemic.
— New York Post (@nypost) January 18, 2024
According to Damian Williams, the U.S. Attorney for the Southern District of New York, Dagar “stole information about Paxlovid from his employer, Pfizer, and used that illegal edge to profit in the stock market.” This is a classic example of insider trading, where an individual uses non-public information for personal gain, undermining the integrity of the financial markets.
On November 4, 2021, just a day before Pfizer announced its clinical trial results for Paxlovid, Dagar learned of the positive outcomes and bought short-dated, out-of-the-money Pfizer call options. These options were set to expire in days and weeks, a risky move that paid off when Pfizer’s stock price soared more than 10% following the announcement. Dagar scored a profit of over $270,000 based on the confidential information.
Amit Dagar was found guilty of securities fraud. He used confidential data surrounding Paxlovid, a COVID-19 treatment, to gain profits in the stock market.https://t.co/kF9TqnWqqd
— CBS 21 News (@CBS21NEWS) January 18, 2024
The verdict also raises questions about corporate oversight and the measures to prevent insider trading. Pfizer has made great efforts to convince the public that it is committed to ensuring widespread access to its COVID-19 treatment. While the pharmaceutical giant has spent untold millions on public relations to manage the fallout of backlash to vaccine mandates, the latest incident will undoubtedly raise new questions about the company’s internal policies.
Dagar now faces a maximum sentence of 20 years for securities fraud and another five years for conspiracy to commit securities fraud. Legal experts believe his actual sentence in federal prison will be significantly less than the maximum. The judge will impose the sentence at a later hearing based on the evidence in the case and the guidelines prescribed by federal law.