The Securities and Exchange Commission recently announced that it filed a settled insider trading case against Cheryl Kramer, a Maryland resident who allegedly sold her entire stake in Sage Therapeutics, Inc. before the Massachusetts-based drug developer disclosed bad news about one of its key products. In a complaint filed on September 24, 2026 in the U.S. District Court for the District of Maryland, the SEC alleged that Kramer violated a duty of trust and confidence owed to an unnamed Sage employee. According to the complaint, in June 2023 that employee shared material nonpublic information (“MNPI”) with Kramer about how the FDA was viewing Sage’s application for approval of its drug to treat major depressive disorder (“MDD”). In the days before Kramer traded, the insider allegedly learned that the FDA had removed MDD entirely from the drug’s proposed label. The insider, who had allegedly attended at least one meeting about the agency’s comments, had been told by the company to keep the information strictly confidential. Before Sage announced on August 4, 2023, that the FDA had declined to approve the drug for MDD, Kramer allegedly sold every Sage share she owned, including shares she had held for more than a year. Sage’s stock fell 53 percent after the announcement. By selling beforehand, Kramer allegedly avoided approximately $11,140 in losses.
According to the SEC, without admitting the allegations, Kramer consented to the entry of a final judgment, which the court approved on October 2, 2026. Under the final judgment, Kramer is permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. She also agreed to pay $11,139.60 in disgorgement, $2,416.61 in prejudgment interest, and a civil penalty of $11,139.60.
SEC Litigation Release | Complaint | Final Judgment – Kramer