A U.S. corporate director who traded on inside information about the planned acquisition of the company where he sat on the board has been convicted on securities fraud and insider trading charges.
On Wednesday, a federal jury in New Jersey convicted four people — including the director who first learned about the proposed deal, Rouzbeh “Ross” Haghighat, and three others that he tipped off to the deal — of various charges in connection with an insider trading scheme that generated more than US$600,000 in illicit trading profits.
According to court filings, in May 2023, Haghighat learned about the proposed acquisition of the Seattle-based biopharmaceutical company, Chinook Therapeutics, Inc., where has was a director, by Novartis AG, in a US$3.2-billion deal.
In anticipation of that deal, he then bought securities in the company, and tipped three others, who also bought shares. And, in June 2023, the two companies negotiated a deal that caused the target company’s shares to spike, generating profits for the four traders.
Now, the jury has convicted Haghighat of one count of securities fraud, 16 counts of insider trading and two counts of conspiracy. The others were also convicted on various counts of securities fraud and insider trading. They are scheduled to be sentenced on May 4, 2026.
A parallel civil case brought by the U.S. Securities and Exchange Commission was stayed earlier this year, pending the outcome of the criminal trial.
“Haghighat abused his role as a senior corporate executive, breaching the trust and confidence placed in him by shareholders, to enrich himself and his friends and family. He schemed together with his co-defendants to illegally profit from non-public, insider trading information,” said Matthew Galeotti, acting assistant attorney general in the U.S. Department of Justice’s criminal division, in a release.