A former Mylan executive pleaded guilty on Friday to insider trading that earned him more than $ 4 million.
Dayakar Mallu, 51, now of Orlando, will be sentenced by US District Judge W. Scott Hardy on January 24.
According to the plea deal, Mallu faces a range of sentences ranging from 57 to 71 months in jail and has agreed to pay $ 4.8 million.
The case was initially filed under seal last month. The plea hearing was not on the Pittsburgh U.S. District Court’s online schedule on Friday.
Mallu’s attorney, Aitan Goelman, said Friday night he had no comment.
Mallu, formerly of McDonald’s, was briefed by Mylan’s CIO on four occasions about an acquisition and two drug requests to the FDA over a period of one and a half years, court records show , allowing him to illegally earn $ 7.3 million.
Mallu worked for Canonsburg-based Mylan from May 2011 to March 2017. During the last three years of this period, according to criminal information filed against him, Mallu served as vice president of information technology for global operations. .
In that role, he reported to Mylan’s CIO, according to the file, with whom he had an outside relationship, including attending family events together and serving as a partner in an outside business. Criminal Intelligence lists the CIO as an anonymous co-conspirator. A Federal Securities and Exchange Commission complaint filed against Mallu on Friday identifies this person as a “senior executive.”
The CIO lived in Upper St. Clair and was hired to lead Mylan’s IT operations in September 2014, according to court documents.
Criminal reports alleged that Mallu had conspired with the IOC in an insider trading scheme from September 2017.
According to the SEC complaint, Mallu received the advice between September 2017 and July 2019. The first occurred when the senior executive learned that Mylan’s generic option for Copaxone, a treatment for multiple sclerosis, was about to be approved by the FDA.
On the same day, September 29, 2017, Mallu bought nearly $ 800,000 of Mylan shares, the government said.
Four days later, FDA approval was announced and the value of Mallu’s shares increased by nearly $ 700,000.
In January 2019, the senior executive alerted Mallu that the generic asthma drug, Wixhela Inhub, was about to be approved.
Mallu bought 1,000 shares of Mylan call option contracts for $ 38,000, and a day later, when the approval was announced, the value increased by $ 84,000.
Then, on January 30, 2019, the senior executive learned that Mylan was going to report lower than expected financial results.
The senior executive knew this would negatively impact Mylan’s share price and several weeks later passed this information on to Mallu using a secure messaging and calling app to that Mallu can negotiate on it, ”the SEC complaint said.
Mallu was able to transact to protect against potential loss, the government said.
The last piece of advice was for the merger between Mylan and Pfizer’s generic business, Upjohn, in November 2020 to form Viatris Inc.
Mallu used the information the senior executive provided about the merger to purchase call option contracts for $ 8.4 million.
When the merger was announced, the value of Mallu’s options increased by $ 2.2 million.
According to the SEC file, on several occasions Mallu paid the senior manager in Indian rupees.
“The senior executive ordered Mallu to make these payments in person, in India, in cash to avoid detection,” the complaint says.
As a result of the exchanges, according to criminal reports, Mallu made a net profit of $ 4.2 million, which he shared with the co-conspirator.
The two of them, the document continued, “engaged in cash transactions in foreign currencies, used trusted intermediaries to exchange money in a foreign country, and used methods of communication not found to cover up the illegal nature and the benefits of their plot, ”the criminal intelligence report said.
Viatris said in a statement: “We are aware of the actions taken by the government today with regard to Mallu, a former employee of Mylan. The company is committed to upholding the highest standards of integrity and compliance with the law. The company fully cooperates with the authorities. We are unable to comment further on this matter. “
Mallu also pleaded guilty to filing a false income tax return related to a computer programming company he owns in Farmington Hills, Michigan, named Opel LLC.