An Inside (Trading) Job: Criminal Forfeiture Order Cancels out SEC Disgorgement in Insider Trading Case
In October of 2018, a federal jury found Harold Altvater guilty of insider trading charges after he dumped shares of Ariad Pharmaceuticals in advance of a negative FDA announcement about one of Ariad’s drugs. Altvater’s ex-wife, Maureen Curran, was the former senior drug safety executive at Ariad Pharmaceuticals between October 2013 and January 2014, when it is alleged that Curran told Altvater that the FDA had expressed safety concerns about Ariad’s leukemia drug Iclusig.
The SEC filed an action in 2017, alleging that Altvater profited by more than $100,000 by selling his shares in advance of the FDA’s announcement regarding Iclusig. In Judge Nathaniel M. Gorton’s July 22, 2020 Final Judgment against Altvater in the SEC case, Judge Gorton found Altvater liable for disgorgement in the amount of $112,569. Interestingly, however, Judge Gorton found that the disgorgement ordered was “deemed satisfied” by the criminal forfeiture order for $115,657 entered against Altvater in January 2019.
Although a court’s finding that a criminal forfeiture order satisfies a later SEC disgorgement order is not novel, see SEC v. Little, No. 1:17-CV-03536 (S.D.N.Y., 2019), this case signals an increasing trend that judges are willing to permit criminal forfeitures to satisfy later administrative penalties, such as SEC disgorgement orders.