Insider trading scam spurred by $11.2B Gilead deal earns a stretch in prison

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.

The best place to read Endpoints News? In your inbox.

Comprehensive daily news report for those who discover, develop, and market drugs. Join 42,100+ biopharma pros who read Endpoints News by email every day.

Free Subscription

Head of Business Development
Wren Therapeutics Boston, MA
Life Sciences Venture Professional
Northpond Ventures Washington, DC
Senior Drug Discovery Oncologist
Schrödinger New York, NY

Visit Endpoints Careers ->