Jonathan Stempel

(Reuters] – Insider trading is a crime in which a former chief financial officer for a New Jersey Biotechnology Company was accused of giving nonpublic information to his girlfriend about research results regarding a novel breast cancer treatment.

On Tuesday, Usama Malik (47), was indicted as the ex-CFO of Immunomedics (NASDAQ:) Inc., insider trading and securities fraud.

New Jersey Prosecutors had earlier in December accused Malik and Lauren Wood, the former Immunomedics communications chief, of securities fraud. Wood was also his girlfriend.

Malik’s lawyers Barry Berke. Michael Martinez. Rodney Villazor made a joint statement.

“The prosecution presents a false and speculative narrative in seeking to wrongly hold Mr. Malik responsible for the independent and modest trading of others,” they continued. “Mr. Malik looks forward to the truth coming out and being vindicated at trial.”

Lawyers for Wood didn’t immediately reply to our requests for comment.

Prosecutors claimed that Malik was aware, before the April 6, 2020 announcement by the U.S. Food and Drug Administration, of the fact that Immunomedics would allow it to stop its trials for Trodelvy as a breast cancer treatment because the drug had been effective.

Malik, a reputed informant, reportedly disclosed these results to Wood. Wood lived at that time with Malik even though she was out of the company.

Prosecutors claimed that Wood bought 7k Immunomedics shares at $64,400, and then sold them 3 months later for $213 618.

Malik also leaked results to relatives who traded in Immunomedics stocks, according to the indictment.

Gilead Sciences Inc (NASDAQ) purchased Immunomedics in October 2020 for $20.6 million.

Malik was later appointed chief executive officer of Fore Biotherapeutics (a privately owned company), a position he had lost after he was initially charged.

According to the U.S. Securities and Exchange Commission, Malik and Wood were both civilly charged in December.