Pharmaceutical Company Exec Settles Insider Trading Suit
The US Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the Northern District of Illinois against Arthur H. Reed, who during the relevant time period was Director of Contract Marketing for APP Pharmaceuticals, Inc., and Allan F. Derusha, Reed’s father-in-law.
The SEC alleges that Reed and Derusha engaged in unlawful insider trading and/or tipping in advance of APP’s July 7, 2008 public announcement that it was being acquired by Fresenius SE.
According to the SEC complaint, Reed on or before May 27, 2008 learned through his employment at APP that APP was in the process of being acquired by another company and subsequently purchased $438,504 of APP stock based on his knowledge of the pending acquisition.
Reed also tipped his father-in-law, Derusha, regarding the pending acquisition, and Derusha subsequently purchased $257,374 of APP stock.
Reed and Derusha sold their APP stock after APP’s acquisition was publicly announced, realizing $272,958 and $163,281 in profits respectively.