SEC v. Robert D. Ramnarine, Case No. 2:12-cv-04837-SDW-MCA. On August 2, 2012, the SEC announced insider trading charges against Robert Ramnarine, a high-level executive in the treasury department at Bristol-Myers Squibb Co. After getting material nonpublic information regarding the potential acquisition of ZymoGenetics, Pharmasset, and Amylin by Bristol or others, Ramnarine traded in options of common stock of each soon-to-be-acquired company. After the public announcement of each acquisition agreement, the price of the securities bought by Ramnarine went up and he sold at a profit. Before placing orders to purchase options, Ramnarine researched whether the trading could be detected and traced back to him. Using his work computer, Ramnarine conducted a search on http://www.yahoo.com for “can option be traced to purchaser.” He conducted other searches using the following phrases: “can stock option be traced to purchase inside trading” and “how to detect can stock option be traced to purchase inside trading.” He conducted other searches for: “insider trading options,” “insider trading options trace,” “illegal insider trading options trace,” and “insider trading options trace illegal.” Ramnarine also used his work computer to view articles, such as: Ways to Avoid Insider Trading, Types of Insider Trading, and The Purpose of Insider Trading Laws. He also viewed an article relating to an SEC enforcement action arising from illegal trading in stock options, as well as a SEC press release announcing an enforcement action arising from illegal trading in call options in advance of an acquisition announcement. The SEC charged Ramnarine with violating Section 17(a) of the Securities Act and Sections 10(b) and (14)(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, an officer-and-director bar, a permanent injunction, and an order freezing the assets in Ramnarine’s brokerage accounts. In a parallel criminal action, the U.S. Attorney’s Office for the District of New Jersey announced that Ramnarine had been arrested.
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