When Bristol-Myers Squibb ($BMY) wanted to take over a company, execs turns to Robert Ramnarine in their Princeton, NJ, office to do the confidential due diligence work on the target company's pension plan. But his plan for feathering his own nest with the insider information he picked up is leading to early retirement--in prison.
Ramnarine was sentenced to one year and one day of jail time after pleading guilty to one count of securities fraud related to the ex-exec's purchase of options on Amylin stock as Bristol-Myers readied its $5.3 billion buyout last year. As Reuters reported, Ramnarine did a little online sleuthing on how insider trading is detected--evidently without realizing the Internet searches on insider trading can help make a case against you.
Ramnarine is also forking over $324,711 in a forfeiture of the money he made on three deals--which include options on ZymoGenetics and Pharmasset, which BMS ultimately didn't buy, probably to its regret--along with a $10,000 fine.
Federal investigators have been charging a variety of people with insider trading over the past two years. The biggest case being pursued involves SAC Capital Advisors hedge fund trader Mathew Martoma, who allegedly got insider info on the Alzheimer's drug bapineuzumab from experts involved in the research. And the investigations have picked up much smaller fry as well, including some old friends who occasionally got in on the action.
Martoma's trial was recently pushed back to early January.
Given the volatility of biopharma, the industry presents a lot of tempting opportunities for insider trading. But if enough of the perpetrators get caught and wind up in prison, like Ramnarine, the feds are hoping to send a message to everyone in the industry that they have their eyes on suspicious trades.
- here's the report from Reuters