Ramkumar Rayapureddy, the Viatris chief information officer who was accused of insider trading that netted a friend $4.8 million, has been cleared of charges, according to the law firm Linklaters.
The U.S. Department of Justice (DOJ) has dismissed all charges with prejudice, meaning that the government can’t refile the case. The decision was reached two weeks before Rayapureddy’s trial was set to begin in the Western District of Pennsylvania.
In its release, Linklaters said it was prepared to prove that evidence against Rayapureddy had been fabricated and that he did not provide any inside information to Dayakar Mallu.
In an interview with Fierce Pharma, Linklater partners Adam Lurie and Doug Davison pointed to a trial memorandum, filed last week, which indicated that they had evidence that someone else from the company tipped off Mallu.
The trial memo added that there also was incriminating evidence of the third party’s own trading, which showed the “lack of thoroughness and investigative steps not taken with respect to the Government’s investigation,” the lawyers wrote.
“This case never should have been brought,” Lurie said in the release.
Neither the DOJ nor the Securities and Exchange Commission responded to a request for more information.
In an indictment that was unsealed in November 2022, Rayapureddy, 55, was alleged to have provided his former colleague, Mallu, with information that allowed him to conduct the trades. Rayapureddy faced three counts of securities fraud and one count of conspiracy to commit securities fraud.
“The company is extremely pleased with the dismissal by the Department of Justice of all of its charges filed against Ramkumar Rayapureddy,” a Viatris spokesperson wrote. “We have never wavered in our confidence in Ram and his integrity or that he would ultimately prevail in this case. We look forward to his return.”
Rayapureddy was on leave during his legal fight.
Mallu, 53, who was formerly the chief of global IT operations with the company, when it was known as Mylan, pleaded guilty in the case in September 2021. He was alleged to have made $4.3 million from the trades and was ordered to pay a fine of $4.8 million.
Rayapureddy was accused of providing information to Mallu on four occasions from September 2017 and July 2019. Mallu left Mylan in March 2017. His biggest haul acting on insider advice, according to the DOJ, came when he gained $2.2 million with trades before Mylan merged with Pfizer’s Upjohn.