The U.S. Department of Justice announced a 19-count indictment charging five individuals with securities fraud, insider trading, and related conspiracies for allegedly trading on material nonpublic information about a merger between two companies and generating more than USD 600,000 in profits. According to court documents, between May and June 2023 Rouzbeh “Ross” Haghighat, a director of a Seattle-based biopharmaceutical company (Company-1), allegedly obtained confidential information about another pharmaceutical company’s (Company-2) proposed acquisition of Company-1, purchased Company-1 securities, and tipped others with the expectation they would trade. The indictment alleges Company-2 made a confidential proposal in May 2023 at a per-share price above the then-current market value, negotiations followed, and the June 2023 announcement caused Company-1’s share price to spike. Ross Haghighat is charged with one count of securities fraud, 16 counts of insider trading, and two counts of conspiracy; the other defendants face combinations of securities fraud, insider trading, and conspiracy counts. If convicted, the defendants face maximum penalties of up to 25 years’ imprisonment on securities fraud and up to 20 years on each insider-trading count, with certain conspiracy counts carrying up to 25 years. The U.S. Postal Inspection Service is investigating, and the Department noted that an indictment is an allegation and defendants are presumed innocent unless proven guilty beyond a reasonable doubt.

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