August 31, 2017

The Securities and Exchange Commission today charged an accountant and three others with insider trading on market-moving news about the New Jersey-based pharmaceutical company where the accountant formerly worked. The SEC’s complaint, filed in federal court in New Jersey, alleges that Evan R. Kita, a CPA and former accountant at Celator Pharmaceuticals Inc., tipped two of his friends with confidential information about the clinical trial results for Celator’s cancer drug and its acquisition by Dublin-based Jazz Pharmaceuticals Plc almost three months later.  Celator’s stock rose more than 400 percent in March 2016 when it announced positive results for its drug to treat leukemia, and Jazz Pharmaceuticals offered to pay a hefty premium in May 2016 to acquire Celator. According to the SEC’s complaint, Daniel Perez and Richard Yu purchased Celator stock based on Kita’s tips before the two announcements and agreed to share their trading profits with him.  The SEC alleges that Richard Yu passed Kita’s tips to his father, Chiang Yu, who also traded in advance of both announcements.  To avoid detection, Kita allegedly communicated with Perez and Richard Yu through an encrypted smartphone application. SEC

Tagged in: Insider Trading, Securities Fraud,