An Indian-origin scientist has agreed to settle charges that he engaged in insider trading after learning that his company was about to acquire a life sciences company.
Anup Madan, 52, of Washington was a principal scientist with LabCorp's Covance Genomics Laboratory.
The US Securities and Exchange Commission's complaint alleges that Madan learned of the pending acquisition by LabCorp of Sequenom, a Delaware corporation headquartered in San Diego that provides molecular diagnostic testing services, with an emphasis on noninvasive prenatal testing.
Without admitting or denying the allegations, Madan agreed to the entry of a final judgment permanently enjoining him from future violations of the Securities Exchange Act rules. Madan will disgorge his ill-gotten gains and pay a penalty of USD 14,023, which is equal to the disgorgement amount.
Madan learned of the acquisition when he conducted a due diligence related site visit to Sequenom's San Diego facilities.
Over the next two trading days, Madan purchased 9,300 shares of Sequenom stock despite having signed a company insider trading policy that prohibited trading based upon confidential information that he acquired in the course of performing his job duties.
On the date of the public announcement, Sequenom's stock price increased 176%, allowing Madan to sell his shares that same day for a profit of over USD 14,000.
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