A Florida man charged with insider trading on a major Gilead deal has turned over all of his profits — and then some — on his way to a one-year sentence in prison.
Back in 2011, Jay Fung, 42, got a tip from a friend and ex-Morgan Stanley broker Kevin Dowd about Gilead Sciences’ planned $11.2 billion buyout of Pharmasset. According to a Reuters story, Dowd had learned about the buyout from a director at Gilead who was a customer at his branch.
Fung then bought Pharmasset call options and shares just days before the acquisition was announced. Gilead bought the company at a 89% premium. Fung immediately sold the shares and options he bought post-acquisition and made more than $250,000 in profits, prosecutors said.
After cashing out, Fung paid Dowd $35,000 for the tip.
Dowd was later slapped with a criminal conspiracy charge, eventually settling with the SEC and getting probation.
Fung didn’t make out as well. Aside from his year in prison, Fung will be paying a $2,000 fine after forfeiting over $345,000 associated with the deal.
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