Former Mylan executive pleads guilty to insider trading By Reuters
By Jonathan Stempel and Chris Prentice
(Reuters) – A former information technology executive at Mylan (NASDAQ:) pleaded guilty on Friday to insider trading for using tips from the drugmaker’s chief information officer to trade in its stock, generating $4.27 million of illegal profit, authorities said.
Dayakar Malu, 51, pleaded guilty to conspiracy to commit securities fraud and another unrelated charge, helping to prepare false tax returns, in front of U.S. District Judge W. Scott Hardy.
Mylan is now known as Viatris Inc after merging last November with Pfizer Inc (NYSE:)’s Upjohn off-patent drug business, which Pfizer spun off. Canonsburg, Pennsylvania is where the combined company has its headquarters. It’s a suburb of Pittsburgh.
The authorities claim that Mallu sold Mylan stock from October 2017 to July 2019 based upon material non-public information regarding the company’s results and U.S. Food and Drug Administration approved drug applications, and the Upjohn merge.
Mallu is now in Orlando, Florida and was previously Mylan’s vice president for global operations information technology. He also knew the chief information officer and was a close friend.
According to the prosecutors, Mallu was charged with tax returns in relation to Farmington Hills computer programming company that he owned.
A plea agreement between the U.S. Department of Justice and Mallu suggests that he could spend 57-71 months prison in addition to his January 24, 2022 sentencing.
According to court records, he also consented to forfeit $4.27million and to make restitution the Internal Revenue Service. The U.S. Securities and Exchange Commission also filed civil charges.
Aitan Goelman (a Mallu’s lawyer) declined to comment.
According to Viatris and his LinkedIn Page, Ramkumar Rayapureddy was Mylan’s CIO during Mallu’s trading. He now holds the exact same position at Viatris.
According to the SEC, Mallu was able to share some of his profits with the person who provided him with inside information. He instructed him to pay cash in India to avoid being detected.
Rayapureddy has not yet responded to my request for comment.
Viatris released a statement saying that “the company is committed the highest standards in integrity and compliance with law.” It has cooperated fully with the authorities. The company is unable to make any further comments.
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