Ex-FBI trainee made $82K in illegal profits over Merck's $1.9B Pandion acquisition: SEC

Though one would think he would know better, a former FBI trainee has been charged for making $82,000 in illegal stock trading ahead of Merck & Co.’s $1.85 billion acquisition of Pandion Therapeutics last year.

After little biotech Pandion played hardball with Merck, refusing the Big Pharma’s initial offer of $65 million upfront and nearly half a billion dollars in attached biobucks, the two negotiated for months. Eventually, they settled on a Merck buyout to the tune of $60 a share—or $1.85 billion total—for Pandion’s pipeline of immune system modulators in February 2021.

Now, Seth Markin, a former FBI trainee and then-romantic partner of an associate for a law firm representing Merck, has been charged with insider trading related to the acquisition. Markin, 31, secretly read a binder of documents about the planned offer from his romantic partner at the time, according to a July 25 Securities and Exchange Commission (SEC) filing (PDF). He was able to access the information because the two often worked from home together during the pandemic, the SEC noted.

Armed with information gleaned from the documents, Markin snapped up 2,270 Pandion shares between Feb. 1 and Feb. 23, 2021.

The ex-FBI trainee didn’t keep the information to himself, either. Markin tipped off his friend Brandon Wong, 38, who scooped up a total of more than 35,000 Pandion shares, according to the SEC. Once the share price jumped 133% after the news of the sale to Merck went public, Wong made about $1.3 million. The complaint also alleges that Wong bought Markin a Rolex as a “thank you” for the confidential information, which the two had shared over an encrypted messaging app.

The announcement comes from the SEC Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to identify suspicious trading patterns. The SEC investigation is still underway.