The U.S. Department of Justice recently announced that federal prosecutors in New Jersey charged six individuals for their roles in an insider trading and market manipulation scheme in which they allegedly “used stolen information, falsified data, and fake press releases to mislead investors and enrich themselves.” On December 19, 2025, federal prosecutors unsealed a complaint charging five individuals – Muhammad Saad Shoukat; his brothers Muhammad Arham Shoukat and Muhammad Shahwaiz Shoukat; and his friends Daniyal Khan and Izunna Okonkwo – for their roles in the scheme. A sixth individual, Gyunho Justin Kim, was charged in a separate complaint for his role in the scheme.
According to case documents, the six participants were actually involved in three separate but related securities fraud schemes that took place between June 2020 and February 2024, comprised of an international insider trading scheme and two separate manipulation schemes involving the stock prices of two biopharmaceutical companies. According to federal prosecutors, the insider trading scheme was enabled by Kim who worked for an investment bank and had access to material nonpublic information (“MNPI”) about certain publicly-traded healthcare and biopharmaceutical companies that were involved in multiple mergers and acquisitions. Kim allegedly shared MNPI related to at least nine of these deals with Saad Shoukat who traded in securities based on the tip. Saad Shoukat also allegedly shared the tip with Arham Shoukat, Shahwaiz Shoukat, Khan, and Okonkwo who also purchased securities based on the MNPI. According to federal prosecutors, the defendants collectively earned at least $41 million in illegal profits in this scheme.
In what prosecutors are calling the Olema Scheme, Saad Shoukat and Arham Shoukat allegedly assisted in manipulating the stock price of publicly-traded biopharma company Olema. After purchasing Olema stock in the spring of 2021, Saad Shoukat and Arham Shoukat allegedly gained access to confidential information that showed how a certain breast cancer treatment drug developed by Olema was less effective than expected. The two allegedly conspired with others to falsify data that looked like it came from Olema and then released the false data, which caused Olema’s stock price to rise temporarily. While the stock price was artificially inflated, Saad Shoukat, Arham Shoukat and others reportedly sold large amounts of Olema stock, thereby enabling them to generate illegal profits and avoid losses.
In a second manipulation scheme, known as the Opiant Scheme, Saad Shoukat, his brothers, and others allegedly manipulated the stock price of publicly-traded biopharma company Opiant. According to federal prosecutors, Kim provided MNPI to Saad Shoukat about the impending acquisition of Opiant, and Saad Shoukat and his brothers purchased Opiant stock based on the tip. However, in or around April 2022 when the potential acquisition reportedly stalled, Saad Shoukat and his brothers worked with others to publish a fake press release announcing Opiant’s purported merger with another company – an announcement that reportedly caused Opiant’s stock to increase by approximately 29 percent. According to federal prosecutors, the brothers generated illegal profits by selling their Opiant shares when the stock price was inflated – actions that allegedly caused substantial losses for other Opiant investors.
The six defendants face various criminal charges in the US District Court for the District of New Jersey, including securities fraud, insider trading, wire fraud and conspiracy, in connection with the insider trading scheme. The Shoukat brothers were additionally charged with conspiracy to commit market manipulation fraud and other offenses for their roles in the manipulation schemes.
The U.S. Securities and Exchange Commission also filed parallel civil charges against the six defendants for their roles in the three securities fraud schemes. The SEC complaint, which was filed in the U.S. District Court for the District of New Jersey on December 22, 2025, charged all six defendants with violating Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 thereunder, and all defendants except Khan with violating Section 14(e) of the Exchange Act and Rule 14e-3 thereunder. The Shoukat brothers were also charged with violating Section 17(a) of the Securities Act of 1933. The SEC is seeking injunctive relief, disgorgement with prejudgment interest, and the payment of civil penalties from each defendant. The SEC is also requesting that the court permanently enjoin Kim from acting as or being associated with any broker, dealer, or investment advisor. In addition, the SEC is seeking the payment of disgorgement with prejudgment interest from relief defendants Mishal Anwar and Gozie Okonkwo, whose accounts were allegedly used to generate illicit profits during the scheme.
DOJ Press Release | Unsealed Criminal Complaint | Criminal Complaint – Kim | SEC Litigation Release | SEC Complaint