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Six individuals, including a Nigerian national, have been charged by the United States authorities over their alleged involvement in a years-long insider trading and market manipulation scheme that generated at least $41 million in illicit profits.
The Federal Bureau of Investigation said the suspects exploited material non-public information and deceptive tactics to manipulate stock prices and mislead investors between June 2020 and February 2024.
Senior Counsel Philip Lamparello said 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
Among those charged is Izunna Okonkwo, 33, a dual U.S. and Nigerian citizen. Others named in the complaint include Muhammad Saad Shoukat, 33; his brothers Muhammad Arham Shoukat, 35, and Muhammad Shahwaiz Shoukat, 36, all dual U.S. and Pakistani citizens, and Daniyal Khan, 33, a dual U.K. and Pakistani citizen.
Prosecutors said the case involves three overlapping schemes: (i) a multi-million-dollar insider trading scheme (the “Insider Trading Scheme”); (ii) a scheme to manipulate the stock price of a biopharmaceutical company developing a treatment for breast cancer (“Olema Manipulation Scheme”); and (iii) a scheme to manipulate the stock price of a different biopharmaceutical company seeking to prevent opioid overdoses (“Opiant Manipulation Scheme,” together with the Olema Manipulation Scheme, the “Market Manipulation Schemes”).
Court documents allege that a co-conspirator working at an investment bank obtained material non-public information on at least nine pending mergers and acquisitions in the healthcare and biopharmaceutical sector. The information was allegedly shared with Saad Shoukat, who traded on it and tipped off others, including Okonkwo, leading to illicit profits of at least $41 million.
According to the FBI, “Kim worked at an investment bank that was actively involved in multiple mergers and acquisitions of publicly traded healthcare and biopharmaceutical companies. Kim obtained MNPI about many of these pending deals, either by working on deals directly or from others who did.
“Kim illegally shared MNPI about at least nine of these deals with Saad Shoukat, who traded on that information by himself and through others. Saad Shoukat also tipped off others—including Arham Shoukat, Shahwaiz Shoukat, Khan, and Okonkwo—who similarly traded and profited from the MNPI. Overall, Saad Shoukat and his co-conspirators received illicit profits from the Insider Trading Scheme totaling at least $41 million.”
In one scheme, the defendants allegedly manipulated the stock of Olema Pharmaceuticals by falsifying confidential data related to a breast cancer drug to inflate the company’s share price before selling their holdings.
In another case, they are also accused of manipulating shares of Opiant Pharmaceuticals by issuing a fake press release announcing a non-existent merger, which briefly drove up the stock price and allowed the group to profit while investors incurred losses.
“Saad Shoukat, Arham Shoukat, and others actively manipulated the stock price of Olema, a publicly traded company. Olema focused on developing breast cancer treatment through a drug called OP-1250. From the spring of 2021, Saad Shoukat and Arham Shoukat began investing in Olema stock and encouraged others to invest in it. After buying substantial stock in Olema, Saad Shoukat, Arham Shoukat, and others accessed confidential information showing that OP-1250 was less effective than Saad Shoukat and Arham Shoukat had hoped.
“Saad Shoukat, Arham Shoukat, and others then falsified the OP-1250 data the co-conspirators had illegally accessed, and publicly disseminated it in a manner that made it look like the data was real and came from Olema. The release of the false data—which inflated the drug’s efficacy—temporarily caused Olema’s stock price to increase, during which Saad Shoukat, Arham Shoukat, and others profited and avoided losses by selling large numbers of shares in Olema stock.”
