Washington, Dec 20 (IANS) Four Pakistani-origin individuals — three based in the United States and one in the United Kingdom — were among six people charged by US federal authorities in a sweeping $41 million insider trading and market manipulation scheme involving cancer drug and opioid treatment companies, according to court filings.
The US Attorney’s Office announced charges in the District of New Jersey, which said the defendants carried out a years-long scheme to trade securities using material non-public information (MNPI), falsify clinical data, and publish fake press releases to manipulate stock prices and enrich themselves at the expense of investors, Pakistani Americans.
Those charged include brothers Muhammad Saad Shoukat, 33, Muhammad Arham Shoukat, 35, and Muhammad Shahwaiz Shoukat, 36 — all described as dual US-Pakistani citizens — along with Danyal Khan, 33, a dual UK-Pakistani citizen.
Also charged were Izunna Okonkwo, 33, a dual US-Nigerian citizen, and Gyunho Justin Kim, 32, of San Francisco.
“As alleged, the defendants engaged in insider trading and market manipulation on a massive scale — using stolen information, falsified data, and fake press releases to mislead investors and enrich themselves,” Senior Counsel Philip Lamparello said.
According to prosecutors, the case spans three overlapping securities fraud schemes between June 2020 and February 2024: a multi-million-dollar insider trading operation, a manipulation scheme involving a breast cancer drug under development, and a separate plot to inflate the stock of a company developing opioid overdose treatments.
Federal authorities alleged that Kim, who worked at an investment bank involved in healthcare mergers and acquisitions, obtained MNPI about pending deals and shared it with Saad Shoukat, who then traded on the information directly and through associates.
Saad Shoukat allegedly tipped off others, including his brothers, Khan and Okonkwo, allowing the group to reap at least $41 million in illicit profits from insider trading alone.
The second scheme focused on Olema Pharmaceuticals, a publicly traded company developing a breast cancer treatment, OP-1250. Prosecutors alleged that Saad and Arham Shoukat, after investing heavily in the stock, obtained confidential information suggesting the drug was less effective than hoped. They then falsified clinical data and disseminated it publicly to make it appear legitimate, temporarily inflating Olema’s share price before selling large volumes of stock for profit.
A third scheme involved Opint, another publicly traded company working on opioid overdose treatment. Prosecutors said the defendants used MNPI and fabricated a fake merger announcement — complete with a fraudulent website and email addresses — to drive Opint’s stock price up by about 29 per cent. The group then sold shares during the spike, causing substantial losses to investors when the truth emerged.
“The FBI takes allegations of insider trading with the utmost seriousness,” FBI Newark Special Agent in Charge Stefanie Roddy said.
The defendants face multiple counts, including conspiracy to commit securities fraud, insider trading, wire fraud and market manipulation. If convicted, some counts carry maximum penalties of up to 25 years in prison. The criminal complaint detailing the alleged conduct was unsealed this week in federal court in New Jersey.
Kim was charged separately and made his initial court appearance earlier this week, while the remaining defendants were charged in the unsealed complaint, according to prosecutors.
–IANS
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