On Thursday, the Securities and Exchange Commission charged a former vice president of finance, accounting officer, and controller of InterMune (ITMN.DL) with insider trading.
In a press release, the SEC described how Bruce W. Tomlinson "tipped" his friend and former business associate, Michael Sarkesian, on the improving prospects of InterMune's Esbriet drug to win approval from the European Union's Committee for Medicinal Products for Human Use, or CHMP.
Hearing the good news, Sarkesian allegedly bought 400 out-of-the-money call options on InterMune common stock ahead of CHMP's rendering a positive opinion on Esbriet on Dec. 17, 2010. When the news came out, the call options more than sextupled in value, and the SEC alleges that this gave Sarkesian a $616,000 profit.
As is usual in this kind of announcement, revelation of the SEC's charge against the defendant, and conclusion of the matter, were made simultaneously. In this case, Tomlinson has agreed to:
- Stop tipping off his friends with inside information.
- Not take a job as an officer or director of any publicly traded company for a period of five years.
- Pay a $616,000 civil penalty.
In a previous proceeding, Sarkesian agreed to pay a similar $616,000 penalty as disgorgement of profits. In neither case did the defendants either admit or deny wrongdoing.
