May 18, 2023

Former biopharm CFO enters guilty plea for role in insider trading scheme

On May 17, 2023, the US Attorney’s Office for the District of New Jersey (“the USAO”) announced that Washington DC resident Usama Malik, the former chief financial officer of New Jersey-based biopharmaceutical company Immunomedics, Inc., pleaded guilty for his role in an insider trading scheme.  The USAO reports that Malik pleaded guilty to Count One of an indictment that charged him with securities fraud/insider trading.  He is scheduled for sentencing on September 18, 2023.

According to court documents and statements made in court, in April 2020, as Immunomedics’ CFO, Malik was one of the first employees to learn that the company’s breast cancer drug was deemed effective and clinical trials for the drug were no longer necessary.  Shortly after obtaining this material nonpublic information, Malik shared the information with his romantic partner Lauren Wood, a former Immunomedics employee who lived with Malik at the time, as well as three of his family members.  Within hours of receiving the tip, Wood allegedly ordered 7,000 shares of Immunomedics stock.  After news regarding the breast cancer drug’s effectiveness was publicly announced, Immunomedics share price increased by 99.79% compared to the price at the close of the prior day.  According to the indictment, Wood sold her Immunomedics shares in July 2020 for more than $213,000 and paid Malik approximately $65,000.  Malik’s family members who allegedly purchased securities based on Malik’s tips realized approximately $21,000 in unlawful profits.

On December 2, 2021, the Securities and Exchange Commission filed civil charges against Malik and Wood for their roles in the insider trading scheme.  On the same day, the USAO for the District of New Jersey filed parallel criminal charges against the defendants.  In January 2022, the US District Court for the District of New Jersey granted the USAO’s motion to intervene and stayed the SEC’s civil case until the conclusion of the criminal proceedings.

The USAO reports that, in June 2022, Wood pleaded guilty to an information charging her with securities fraud/insider trading.  She is currently scheduled to be sentenced on December 18, 2023.

USAO for New Jersey Press Release | Minute Entry – Guilty Plea | Plea Agreement | Order Granting to Intervene Stay | Criminal Complaint | Indictment