Last week, the SEC prevailed in its first federal court trial of FY 2017. On November 14, 2016, the SEC announced that a jury in the U.S. District Court in the Northern District of California had found a doctor and his friend liable for insider trading in the case of SEC v. Sabrdaran et al.

In a complaint filed in October 2014, the SEC alleged that Dr. Sasan Sabrdaran, the former director of drug safety risk management at InterMune Inc., tipped his British friend Farhang Afsarpour

"with confidential details while he was involved with shepherding the company's application before a European Union regulatory body to market a drug called Esbriet to be used for the treatment of patients with a type of fatal lung disease. Afsarpour, a restaurant owner in the United Kingdom, traded on the inside tips that Sabrdaran communicated to him about the progress of Esbriet's EU marketing application by purchasing securities in his own accounts and using money obtained from friends to trade on their behalf."

The SEC alleged that Afsarpour and several of his friends used the information Afsarpour received to earn over $1 million in illegal profits. Following the verdict, SEC Enforcement Director Andrew J. Ceresney stated that the verdict "reaffirms our commitment to aggressively root out and prosecute insider trading schemes in order to protect the integrity of our markets." An attorney for Sabrdaran told Reuters that Sabrdaran may elect to appeal the verdict, citing "thorny legal issues" in the case that are now before the U.S. Supreme Court.

Following this victory, the SEC is now 1-0 in its FY 2017 federal court trials. As summarized here, the SEC was 4-1-1 in its six federal court trials in FY 2016, undefeated in its six FY 2015 federal court trials (posting a record of 4-0-2), and had a record of 5-7-5 in its 17 federal court trials in FY 2014.

Topics