Federal prosecutors in New Jersey have charged six individuals with participating in an insider trading scheme that allegedly generated $41 million through trades based on confidential information about pharmaceutical mergers and acquisitions. The indictment centers on Gyunho Justin Kim, an investment banker accused of leaking nonpublic details about nine major buyouts between 2020 and 2023.
According to the charges, Kim provided advance knowledge of deals involving companies such as Gilead Sciences, AbbVie, Amgen, Biogen, and GSK. Among these transactions was Gilead’s $21 billion acquisition of Immunomedics and AbbVie’s $10.1 billion purchase of ImmunoGen. Fierce Biotech reported that Kim worked at Citigroup's San Francisco office.
The prosecution alleges that the most lucrative trade involved Pfizer’s $5.4 billion acquisition of Global Blood Therapeutics (GBT). Court documents state that Kim’s employer represented a company interested in acquiring GBT at the time he shared inside information with his friend Saad Shoukat. Shoukat is accused of relaying this information to others who then purchased GBT stock ahead of media reports about the potential takeover. After news coverage caused GBT shares to rise, those involved allegedly sold their holdings for illegal profits exceeding $20 million.
Authorities describe this activity as part of three related securities fraud schemes detailed in court filings. The additional schemes involve market manipulation efforts led by Saad Shoukat and his brothers Arham and Shahwaiz Shoukat.
One alleged plot targeted Opiant Pharmaceuticals, a company developing treatments for opioid overdose. After buying Opiant shares based on tips from Kim about a possible acquisition, Saad Shoukat reportedly collaborated with his brothers to fabricate a press release announcing a fake deal involving Opiant. They created counterfeit websites and email addresses to support the ruse and distributed the announcement via Cision PR Newswire. Following publication, Opiant’s share price surged by 29%, during which time the brothers are said to have sold their shares before news outlets and Opiant itself advised investors to ignore the false statement.
Another case cited in the lawsuit involves Olema Pharmaceuticals’ breast cancer drug candidate OP-1250. In 2021, Saad and Arham Shoukat allegedly invested in Olema without input from Kim but used hacking methods such as spoofing and social engineering to access confidential data suggesting OP-1250 was less effective than expected. The lawsuit claims they falsified efficacy data for OP-1250, making it appear as though it came from an official Olema source, then circulated it on social media platforms.
On November 29, 2021, Olema responded publicly regarding fabricated information being spread online; its stock price rose that day while the brothers reportedly sold their shares during this uptick. When actual clinical results were released on November 30, Olema's share price declined sharply.
“These allegations highlight serious breaches of trust within financial markets,” authorities stated regarding the coordinated efforts described across multiple pharmaceutical companies.
