The other shoe has dropped in the case of two Viatris employees who allegedly used insider information to make trades that netted them $7.2 million.
The SEC has charged the company’s chief information officer Ramkumar Rayapureddy with providing tips to a friend and former colleague who was said to execute trades and share profits by way of cash exchanges made with Indian currency.
According to charging documents, Rayapureddy provided information on four separate occasions between September of 2017 and July of 2019 to Dayakar Mallu, who executed the trades.
In September of last year, Mallu, 52, pleaded guilty to the scheme. Mallu, the former chief of global IT operations who left the company in 2017, netted $4.27 million from the trades and was ordered to pay a fine of $4.8 million. He awaits sentencing, facing a maximum imprisonment of 25 years.
Rayapureddy—a 54-year-old who resides in Pennsylvania and still is employed by Viatris—is charged with three counts of securities fraud and one count of conspiracy to commit securities fraud. If convicted of all charges he would face a maximum of 65 years in prison.
Viatris told Stat News that the company is reviewing the case and "will continue to fully cooperate with the authorities."
Their biggest score, according to a complaint, came in 2019, when Rayapureddy tipped off Mallu about an earnings decline that was about to be announced. The trades Mallu made netted $4.3 million and also allowed them to avoid $703,000 in losses.
Also in 2019, when Mallu was allegedly tipped off about an impending merger between Pfizer’s generics unit Upjohn and Mylan—as the company was known then—Mallu bought call option contracts. When the deal became public in November of 2020, the value of the options increased by $2.2 million, according to the government.