On March 7, 2025, the Securities and Exchange Commission announced that it charged former Acadia Pharmaceutical executive, George Demos, with insider trading in connection with trades made ahead of a public announcement regarding negative news related to a supplemental drug application filed with the FDA. In 2020, Acadia filed a supplemental application seeking the FDA’s approval for the use of Pimavanserin, a Parkinson’s disease psychosis drug, to treat additional forms of psychosis.
According to the SEC’s complaint, Demos was serving as Acadia’s Vice President of Drug Safety and Pharmacovigilance in 2021 when he obtained material nonpublic information that led him to believe that the FDA had made an adverse decision regarding Acadia’s supplemental application for Pimavanserin. Based on this MNPI, on March 8, 2021, Demos sold almost all shares of his vested Acadia stock options. Later that day, Acadia announced that the FDA had identified deficiencies in its drug application, which precluded the company’s efforts to change the drug’s labelling. On March 9, 2021, the day after the announcement, Acadia’s shares dropped by approximately 45 percent allegedly enabling Demos to avoid approximately $1.3 million in losses.
In its complaint, the SEC charged Demos with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. On March 10, 2025, the court approved a settlement with the SEC in which Demos consented to the entry of a judgment that permanently enjoins him from committing certain securities violations and prohibits him from serving as an officer or director of a public company for five years. According to the judgment, Demos must also pay disgorgement, prejudgment interest, and a civil penalty in amounts to be determined by the court upon motion of the Commission.
On March 7, 2025, the U.S. Attorney’s Office for the Southern District of California filed parallel criminal charges against Demos in connection with these trades. To resolve the charges, Demos reached a settlement with federal prosecutors and pleaded guilty to securities fraud – insider trading. As part of his plea agreement, Demos agreed to forfeit $1,313,263, which represents the losses he avoided as a result of the illegal trades. Demos is currently scheduled to be sentenced on May 30, 2025.
SEC Press Release | Judgment| SEC Complaint | USAO SDCA Press Release | Criminal Information | Plea Agreement