* Robert Ramnarine faces three securities fraud counts
* Defendant accused of buying options in takeover targets
* Bristol-Myers says is cooperating; Ramnarine put on leave
* SEC files civil case, seeks brokerage account freeze
By Jonathan Stempel and Ransdell Pierson
Aug 2 A Bristol-Myers Squibb Co
executive was criminally charged with insider trading, accused
of trading options in three companies that the large drugmaker
was looking to buy.
Prosecutors said Robert Ramnarine, 45, made $311,361 in
illegal profit from August 2010 to July 2012 by buying call
options in ZymoGenetics Inc and Pharmasset Inc and call and put
options in Amylin Pharmaceuticals Inc, and selling his
positions once takeovers were announced.
Ramnarine, who was promoted in July to assistant treasurer
for capital markets, was charged with three counts of securities
fraud, according to a complaint made public on Thursday by U.S.
Attorney Paul Fishman in New Jersey. Each count carries a
maximum penalty of 20 years in prison and a $5 million fine.
The U.S. Securities and Exchange Commission filed separate
civil fraud charges against Ramnarine, and seeks both to recover
illegal profit and to freeze the East Brunswick, New Jersey,
resident's brokerage account assets.
Ramnarine was released on $250,000 bond at an afternoon
hearing before U.S. Magistrate Judge Madeline Cox Arleo in the
federal court in Newark, New Jersey, a spokesman for the U.S.
It is unclear whether Ramnarine has hired a lawyer for his
defense. Peter Carter, an assistant federal public defender who
represented him at the hearing, did not immediately respond to a
request for comment.
Ken Dominski, a Bristol-Myers spokesman, said the New
York-based company is cooperating with the government and has
put Ramnarine on administrative leave. "Bristol-Myers Squibb has
clear and strict policies prohibiting trading on material
non-public information," he said.
RESEARCHING INSIDER TRADING
According to the complaint, Ramnarine learned confidential
information about potential takeovers while working as a
director and later as an executive director in Bristol-Myers'
pension and savings investments office in Princeton, New Jersey.
The complaint suggested that Ramnarine was concerned about
his activities, saying that before buying the Pharmasset
options, he had conducted several Internet searches on Yahoo
from his office concerning detection of insider trading.
These searches included "can option be traced to purchaser"
and "insider trading options traceillegal (sic)," and included a
review of an August 2005 SEC press release over alleged insider
trading in Reebok International Ltd call options.
Bristol-Myers bought ZymoGenetics for $885 million in
October 2010. It expects to complete its $5.3 billion purchase
of Amylin this month.
Gilead Sciences Inc agreed in November to buy
Pharmasset after Bristol-Myers dropped out of talks. Gilead
completed the $11 billion acquisition in January.
Federal prosecutors have in the last few years been cracking
down on insider trading.
Fishman's office in June won a record 12-year prison term
for lawyer Matthew Kluger over a $37 million scheme, while U.S.
Attorney Preet Bharara in Manhattan in the last 15 months won
convictions of Galleon Group hedge fund founder Raj Rajaratnam
and former McKinsey & Co consulting firm chief Rajat Gupta.
The criminal case is U.S. v. Ramnarine, U.S. District Court,
District of New Jersey, No. 12-md-08121.