The U.S. Attorney released a criminal complaint, and the Securities and Exchange released a civil one yesterday (August 11) about a ring of insider traders who allegedly made fat profits on insider trading in the stock of biotech Ardea Biosciences. Ardea is now owned by AstraZeneca, a major pharmaceutical.
According to the SEC, stockbroker Paul Rampoldi and his client Scott Blythe III raked in $90,000 in illicit profits trading on insider information about San Diego biotech Ardea Biosciences. According to the SEC, Rampoldi and Blythe got information on Ardea's deal to license a cancer drug, and, later, about its purchase by a major pharmaceutical company AstraZeneca.
According to the SEC, the source of the information was Michael Fefferman, senior director of information technology at Ardea. He tipped his brother-in-law, Chad Wiegand, in advance of public announcements. Wiegand, a stockbroker, made a bundle on the unannounced information. He passed the information to another broker, Akis Eracleoous, who passed it to another broker, Rampoldi, who passed it to a client, Blythe, who bought Ardea options on a Friday for $5000 and sold them the following Monday for $88,000.
Blythe then allegedly withdrew more than $40,000 in cash so he could secretly deliver their portion of the loot to Rampoldi and Eracleous. The SEC earlier charged Fefferman, Wiegand, and Eracleous for their roles.