Ex-pharmaceutical company boss faces insider trading charges

NEW YORK (AP) — The former head of a pharmaceutical company was arrested Tuesday in California on insider trading charges, accused of feeding secrets that enabled friends and family to earn over $700,000 illegally.

Sepehr Sarshar, 53, of Encinitas, California, was charged in Manhattan federal court with securities fraud, wire fraud and fraud in connection with a tender offer. He awaited an initial appearance in San Diego federal court.

Authorities said he provided inside information in 2015 about a pending $3.2 billion buyout offer from Israel-based Teva Pharmaceutical Industries Limited, a generic drug giant, to his friends and family so they could trade securities in Auspex Pharmaceuticals, a company he founded.

Those close associates included a college friend, his then-girlfriend, another longtime friend, and a close relative, authorities said.

William F. Sweeney Jr., head of New York’s FBI office, said it seems obvious that a company’s secrets should not be shared and yet “time and time again we see where those privy to a company’s inside information pass it on to family and friends.”

Acting U.S. Attorney Audrey Strauss said Sarshar’s friends and family made nearly three-quarters of a million dollars.

A message was left with Sarshar’s defense lawyers.

Copyright © 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up