Robert Ramnarine, assistant treasurer for capital markets at Bristol-Myers Squibb Co., was charged with insider trading for making $311,361 in illegal profit by buying stock options in three companies targeted for acquisition.
He appeared in U.S. District Court in Newark, N.J., on Thursday and was released on $250,000 bond.
Mr. Ramnarine, who was executive director of pensions and savings investments before being named assistant treasurer in July, helped the New York-based drugmaker evaluate whether to buy targeted companies, including ZymoGenetics, Pharmasset and Amylin Pharmaceuticals, the FBI said. As he conducted due diligence on pension and savings plans of those companies, he also bought options in all three, violating his duty not to profit from inside information, according to the FBI.
Mr. Ramnarine also conducted Internet searches from his office to determine whether he could be detected by authorities, according to the SEC, which sued him Thursday. One search was on the term “can stock option be traced to purchase inside trading,” according to the civil complaint.
“(Mr.) Ramnarine tried to educate himself about how the SEC investigates insider trading so he could avoid detection,” Daniel M. Hawke, chief of the SEC’s Market Abuse Unit, said in a statement. “Our charges against Ramnarine should serve notice that when you violate insider trading laws, no matter how you scheme, you will be caught.”
Mr. Ramnarine faces three counts of securities fraud, each carrying a maximum prison term of 20 years. The SEC seeks a court order to freeze his brokerage account assets.
After Mr. Ramnarine’s court appearance, Peter Carter, his assistant federal public defender, declined to comment.
Bristol-Myers said Mr. Ramnarine was placed on administrative leave effective immediately. “Bristol-Myers Squibb has clear and strict policies prohibiting trading on material non-public information and is cooperating with the government’s investigation,” Ken Dominski, a company spokesman, said in an e-mail.
Bristol-Myers agreed to buy ZymoGenetics in October 2010 and Amylin in June. It withdrew from talks on buying Pharmasset.
In April, Mr. Ramnarine was responsible for advising Bristol-Myers on how the Amylin transaction would affect the company’s capital structure, cash flow and credit rating, according to the FBI. He also spoke with the company’s investment bankers at Citigroup and credit agencies. Mr. Ramnarine made $55,784 in illicit profit on the deal, according to the FBI.
He also made $225,026 in illicit profit on the Pharmasset deal, buying some of his options on his work-issued BlackBerry, according to the arrest complaint.
Bristol-Myers Squibb had $3.971 billion in defined benefit assets and $3.207 billion in defined contribution assets, both as of Sept 30, according to Pensions & Investments data.