March 12, 2023

SEC settles with California resident to resolve insider trading charges

On March 9, 2022, the SEC announced that it had reached a settlement with California resident Mahmoud Ali Abdelkader to resolve insider trading charges associated with the securities of Audentes Therapeutics Inc.

According to the complaint, Abdelkader’s wife worked for Audentes, a gene therapy company based in California.  Through the course of her employment, Abdelkader’s wife acquired material nonpublic information concerning Audentes’ impending acquisition by Astellas Pharma, Inc. for $3 billion.  As alleged in the complaint, Abdelkader misappropriated the material nonpublic information and purchased approximately $3,500 worth of short-term, out-of-the money Audentes call options in the weeks before the acquisition was announced.  After Audentes made the acquisition public on December 2, 2019, the company’s stock value increased by 106 percent, and Abdelkader allegedly realized $81,580 in illegal profits.

In its complaint, the SEC charged Abdelkader with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  In settlement of these charges, Abdelkader consented to the entry of a final judgment permanently enjoining him from future securities violations, and requiring him to pay disgorgement and prejudgment interest totaling $90,570, and a civil monetary penalty of $81,580.

SEC Press Release | SEC Complaint