The SEC has charged former Sangamo BioSciences executive Winson Tang with insider trading. Tang is accused of telling a friend about a 2014 agreement between Sangamo and Biogen before the news became public.
According to the SEC, Tang, then VP of clinical research at Sangamo, told his friend and business associate Deshan Govender about the deal with Biogen late in 2013. Govender then allegedly passed the information on to Steven Fishoff and other members of an insider-trading ring. The SEC claims members of the ring bought stock and options, enabling them to make a $1.5 million profit when the deal became public and sent Sangamo’s stock up 38% in January.
Lots of this activity took place well downstream of Tang’s alleged actions, but the SEC thinks he had an inkling of how the information might be used. According to the complaint, Tang knew Govender sold non-public information to traders when he shared details of the Biogen deal. Fishoff is accused of wiring $222,000 to Govender in return for the tip.
According to the charge sheet, Tang gave Govender confidential information about Sangamo multiple times during his five years at the company. The SEC complaint picks out one occasion prior to the Biogen deal. That took place in September 2013, when Tang allegedly told Govender about a planned stock offering by Sangamo. The SEC accuses corporations run by members of the insider-trading ring of making short sales ahead of news of the offering becoming public.
Having investigated the case, the SEC is going after Tang, Govender and Fishoff for breaching a rule about the use of manipulative and deceptive practices. The SEC is seeking “disgorgement of ill-gotten gains, prejudgment interest, penalties and injunctive relief.”
The case overlaps with a broader SEC investigation into Fishoff and his associates. In 2015 and 2017, the SEC charged the group with making insider trades in advance of secondary stock offerings. All five of the insider-trading ring defendants have pleaded guilty to criminal charges, and all bar Fishoff have agreed partial settlements with the SEC for their roles in the Sangamo-Biogen case.