The SEC’s complaint, filed in federal court in New Jersey, alleges that Evan Kita, a CPA and former accountant at Celator Pharmaceuticals Inc., tipped two of his friends with confidential information about the clinical trial results for Celator’s cancer drug and its acquisition by Dublin-based Jazz Pharmaceuticals Plc almost three months later. Celator’s stock rose more than 400 percent in March 2016 when it announced positive results for its drug to treat leukemia, and Jazz Pharmaceuticals offered to pay a hefty premium in May 2016 to acquire Celator.
According to the SEC’s complaint, Daniel Perez and Richard Yu purchased Celator stock based on Kita’s tips before the two announcements and agreed to share their trading profits with him. The SEC alleges that Richard Yu passed Kita’s tips to his father, Chiang Yu, who also traded in advance of both announcements. To avoid detection, Kita allegedly communicated with Perez and Richard Yu through an encrypted smartphone application.
”The investing public relies on accountants and other gatekeepers to safeguard confidential information, not use it for personal profit,” said Kelly L. Gibson, Associate Director of the SEC’s Philadelphia Regional Office. ”When gatekeepers violate that public trust as Kita allegedly did, the SEC is committed to holding them accountable.”
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey filed criminal charges against Kita, Perez, Richard Yu, and Chiang Yu.
The SEC’s complaint charges Kita, Perez, Richard Yu, and Chiang Yu with violating antifraud provisions of the federal securities laws and related SEC antifraud rules.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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