BOSTON (Reuters) - A former Puma Biotechnology Inc (PBYI.O) executive was sentenced on Wednesday to 2-1/4 years in prison for trading on inside information ahead of announcements by the biopharmaceutical company about a breast cancer drug it was developing.
Robert Gadimian, 48, was sentenced by U.S. District Judge William Young in Boston after pleading guilty in November to seven counts of securities fraud for carrying out illicit trades that prosecutors said allowed him to earn about $1 million.
The judge also ordered him to pay a $25,000 fine, which is on top of the $1.16 million he previously agreed to forfeit to the government. In court, Gadimian apologized for his conduct and promised not to break the law again.
“I knew what I was doing was not only illegal but morally wrong,” he said. “There is simply no excuse for my actions.”
According to court papers, from 2011 to 2014, Gadimian worked as the Los Angeles-based company’s senior director of regulatory affairs as Puma was developing a breast cancer drug called “neratinib.”
Prosecutors said that from 2013 to 2014, Gadimian twice secretly traded Puma stock and options based on information he learned about positive developments regarding clinical trials involving neratinib before the company announced the news.
The U.S. Food and Drug Administration in July 2017 approved the drug, which is marketed under the name Nerlynx.
Prosecutors said Gadimian made more than $1.1 million through the insider trading scheme, which they said he carried out despite a lack of any financial circumstance that compelled him to commit the crime.
They noted that Gadimian owns a $2.7-million home in Burbank, California, and a 2013 Jaguar FX. Even after losing his job at Puma, he exercised employee stock options worth more than $5 million, prosecutors said in a court filing.
Prior to being charged, Gadimian had lived an upstanding life and had gained the trust of people around him, Young said at Wednesday’s court hearing.
“And yet, you recognize that you threw that all away for greed,” Young said. “Nothing more. For greed.”
Christopher Bruno, Gadimian’s lawyer, acknowledged his client had committed a “brazen” fraud. But he said his client had since first coming under scrutiny in 2014 sought to take responsibility for his actions.
“I think that’s commendable, and I think that speaks to his true level of remorse,” Bruno said.
The case is U.S. v. Gadimian, U.S. District Court, District of Massachusetts, No. 16-cr-10285.
Reporting by Nate Raymond in Boston, editing by G Crosse