GREENBELT, Md. (CN) – The SEC on Tuesday accused an FDA chemist of reaping $3.6 million from illegal trading: trading ahead on inside information about coming announcements of FDA decisions on drug approvals. Cheng Yi Liang also was charged criminally.
Liang concealed his trading by using seven brokerage accounts, none in his own name, says the SEC, which also announced the criminal charges.
One of the accounts Liang used was in the name of his 84-year-old mother, who lives in China, according to the SEC.
According to the SEC complaint, Liang traded in advance of at least 27 public announcements about FDA drug approvals or rejections. He bought shares before 19 drug approvals, shorted stock before 6 disapprovals, and sold shares before two negative announcements to avoid losses, the SEC says.
He got some of his information from a confidential FDA database, the SEC says.
It seeks disgorgement from Liang and the relief defendants, in whose names Liang traded, and penalties and an injunction.