Five people have been formally accused of taking part in a serious insider trading scheme that made them over $600,000 in illegal profits. The charges came after a federal investigation revealed that these individuals bought and sold company shares based on secret information about a major business deal that had not been made public. This kind of trading is against the law because it gives unfair advantages to those who know the secrets, hurting other investors and the fairness of the market.
What Happened?
Between May and June 2023, Rouzbeh “Ross” Haghighat, a director at a biopharmaceutical company in Seattle, allegedly used secret inside information about a planned acquisition of his company by another pharmaceutical company. This acquisition deal was confidential and not yet public.
Ross Haghighat bought shares in his company knowing that the price would soon rise once the deal was announced. He then shared this inside information with four others: Behrouz “Bruce” Haghighat, Kirstyn Pearl, Seyedfarbod “Fabio” Sabzevari, and James Roberge. These individuals also purchased shares before the news was made public. When the acquisition was officially announced in June 2023, the share price jumped, and the group made over $600,000 in illegal profits.
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This type of insider trading is illegal because it gives an unfair advantage to those who know important, secret information that others do not.
The Charges
Ross Haghighat faces multiple charges, including securities fraud, 16 counts of insider trading, and two counts of conspiracy. Behrouz “Bruce” Haghighat, Kirstyn Pearl, Seyedfarbod Sabzevari, and James Roberge face several charges of securities fraud, insider trading, and conspiracy as well.
If found guilty, they could face up to 25 years in prison for securities fraud, 20 years for each insider trading charge, and up to 25 years for conspiracy charges. These harsh penalties reflect the seriousness with which the government treats crimes that threaten the fairness of the financial markets.
Officials’ Statements and Investigation
Matthew R. Galeotti, who leads the Justice Department’s Criminal Division, stated, “The defendants were charged yesterday for allegedly using inside information to make hundreds of thousands of dollars in illegal profits. Insider trading and securities fraud harm our financial markets and put honest Americans at a disadvantage.”
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U.S. Attorney Alina Habba for the District of New Jersey said, “Our office is dedicated to safeguarding the market’s integrity and ensuring that anyone who tries to gain unfair advantages by trading on insider information is held responsible.”
Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group stressed, “Ross Haghighat and his associates believed they could break the rules for financial gain, but yesterday’s indictment makes it clear that no one is above the law.”
The U.S. Postal Inspection Service investigated the case, while prosecutors from the Justice Department’s Criminal Division Fraud Section and the U.S. Attorney’s Office for the District of New Jersey are handling the prosecution.
It is important to note that an indictment is only an accusation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
