- A New York couple has agreed to pay more than $325,000 to settle charges of insider trading in the stock of a biotech company, the SEC said.
- The SEC said that a senior project manager told her partner about failed clinical trial results.
- The partner sold his stock in the company before the trial results were made public, avoiding losses of $103,875.
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A New York-based couple has agreed to pay more than $325,000 to settle charges of insider trading in the stock of a biotech company where one of them was employed, the US Securities and Exchange commission said on Monday.
Holly Hand was the senior project manager overseeing a clinical drug trial for a company formerly known as Neuralstem. The SEC alleges that in July 2017, Hand learned of failed clinical trial results and tipped off her partner, Chad Calice, who then sold all of his Neuralstem stock ahead of the public announcement of the negative news.
According to the SEC’s complaint, Neuralstem stock dropped roughly 50% the morning the news was announced. Calice avoided losses of $103,875. He also tipped off his uncle, who avoided losses of $14,434 by selling before the news, the SEC said.
Calice and Hand were in frequent communication about Neuralstem’s stock price throughout the day that he sold his stock, the SEC said. Calice reinvested in the company the day after the announcement, buying 4,000 shares at $2.82 apiece, below the range of $5.45 and $6 at which he sold the stock.
The SEC’s complaint, which was filed in federal district court in Manhattan, charges Calice and Hand with violating the antifraud provisions of the federal securities laws. Calice and Hand didn’t admit or deny the allegations. They consented to the entry of a final judgment that enjoins them from violating the charged provisions and requires each of them to pay a civil penalty, the SEC said.
Neuralstem changed its name to Seneca Biopharma Inc. in 2019 and merged with Leading BioSciences Inc. in April to become Palisade Bio Inc.