Washington–US federal authorities have charged six individuals, including four men of Pakistani origin, in connection with a sweeping $41 million insider trading and market manipulation scheme involving pharmaceutical companies developing cancer drugs and opioid treatment therapies, according to court filings unsealed this week.
The US Attorney’s Office for the District of New Jersey said the accused carried out a years-long scheme involving the misuse of material non-public information (MNPI), falsification of clinical trial data, and the dissemination of fake press releases to manipulate stock prices and defraud investors.
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. The other accused are 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.
Prosecutors said the case encompasses three overlapping securities fraud schemes carried out between June 2020 and February 2024. These include a multi-million-dollar insider trading operation, a manipulation scheme involving a breast cancer drug under development, and a separate plot to artificially inflate the stock of a company working on opioid overdose treatments.
According to authorities, Kim, who worked at an investment bank involved in healthcare mergers and acquisitions, accessed MNPI related to pending deals and shared it with Saad Shoukat. Saad Shoukat allegedly traded on the information himself and tipped off others, including his brothers, Khan and Okonkwo. The group is accused of earning at least $41 million in illegal profits from insider trading alone.
The second alleged scheme involved Olema Pharmaceuticals, a publicly traded company developing a breast cancer drug known as OP-1250. Prosecutors claimed that Saad and Arham Shoukat, after investing heavily in the company, obtained confidential information suggesting the drug’s performance was weaker than expected. They allegedly falsified clinical data and circulated it publicly to inflate Olema’s stock price before selling large volumes of shares at a profit.
The third scheme centered on Opint, a company developing opioid overdose treatments. Authorities alleged that the defendants used MNPI and fabricated a fake merger announcement, supported by fraudulent websites and email accounts, to drive Opint’s stock price up by about 29 per cent. The accused allegedly sold their shares during the price spike, causing significant losses to investors once the fraud was uncovered.
“The FBI takes allegations of insider trading with the utmost seriousness,” said FBI Newark Special Agent in Charge Stefanie Roddy.
The defendants face multiple charges, including conspiracy to commit securities fraud, insider trading, wire fraud, and market manipulation. If convicted, some counts carry maximum sentences of up to 25 years in prison. Prosecutors said Kim has been charged separately and has already made his initial court appearance, while the remaining defendants were named in the newly unsealed criminal complaint. (Source: IANS)
