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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.

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Comments

Visduh Aug. 12, 2016 @ 7:32 p.m.

The magnitude of this sort of white-collar crime is appalling. $90,000 of illicit profits is just off the scale. Why, next thing you know, these crooks will be pulling down 6-figure gains from their cheating. They should go to jail for years, decades, or life!

Um, where do these billion dollar scams fit into the picture? This one has the look of a cheater who didn't know how to cover his tracks. So, those small-fry are not big-time profiteers, just some dumb cheaters who now appear to have been caught. Poor guys. It might be easier to hold up gas stations than to try to get away with this sort of junk. We can only assume the SEC is looking for minnows when whales go swimming past.

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Don Bauder Aug. 12, 2016 @ 8:43 p.m.

Visduh: You raise an excellent point. Is it productive use of government money to chase small-time inside traders? At least, the SEC has gone after some big fish in recent years. Best, Don Bauder

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