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ARTICLE · 23 APRIL 2024

SEC Wins Novel 'Shadow Trading' Trial Against Biopharma Executive

Osler, Hoskin & Harcourt LLP
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On April 5, 2024, the U.S. Securities and Exchange Commission (SEC) succeeded in its much-watched civil action against Matthew Panuwat, a former business...

CanadaCorporate/Commercial Law
Lawrence Ritchie
Lawrence Ritchie
Robert Lando
Robert Lando
Fabrice Benoît
Fabrice Benoît
Jayne Cooke
Jayne Cooke
Madeleine Worndl
Madeleine Worndl
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On April 5, 2024, the U.S. Securities and Exchange Commission (SEC) succeeded in its much-watched civil action against Matthew Panuwat, a former business development executive at Medivation Inc., a midcap biopharmaceutical company. The SEC's complaint [PDF] raised a novel theory of insider trading known as "shadow trading". Shadow trading involves the use of material non-public information (MNPI) about a reporting issuer to profit from trading the shares of a different, but "economically linked," company. This case was unique in that the defendant was found liable for using information obtained about Pfizer Inc.'s acquisition of Medivation (the acquired), to profit from trading securities of Medivation's competitor (the competitor) when the Pfizer acquisition (the acquisition) had not yet been publicly announced.

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