The latest pharma company to wind up in the middle of insider trading charges? Merck. A former employee at the drug giant has been charged after allegedly tipping off a former classmate about potential deals that scored him $683,000.
The SEC and federal prosecutors earlier this week filed a civil and criminal complaint against 32-year-old Zachary Zwerko, a senior finance analyst in the company's financial evaluation and analysis group, who worked at Merck ($MRK) until July, the Boston Globe reports. According to court documents seen by the paper, Zwerko shared info from confidential files about Merck's acquisition targets with his friend, a trader, who was not charged in this case.
From there, the friend went on to trade based on Zwerko's tips, making moves on a future Merck buyout of Idenix ($IDIX) as well as Ardea Biosciences and ViroPharma--both considered potential acquisitions at the time and both that were bid on by other companies, Reuters reports. The resulting charge? One count of conspiracy to commit securities fraud.
As a Merck spokeswoman told the news service, the company is cooperating with the SEC on the case. As for Zwerko, he's required to appear in a New York court this week after being released on a $1 million bond.
M&A, which has abounded in the pharma industry as of late, also set the stage for another recent insider trading charge--this one pinned on a former Bristol-Myers Squibb ($BMY) exec. Last October, Robert Ramnarine landed behind bars for a year and a day after pleading guilty to profiting off private information about BMS' buyout of diabetes-drug specialist Amylin Pharmaceuticals.
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