Washington D.C., Sept. 17, 2021 —
The Securities and Exchange Commission today announced insider trading charges against Dayakar R. Mallu, of Orlando, Florida, who generated gains and avoided losses totaling over $8 million by trading in the securities of his former employer, Mylan N.V., ahead of four public announcements between Oct. 3, 2017, and July 29, 2019.
The SEC’s complaint, filed in the United States District Court for the Western District of Pennsylvania, alleges that Mallu received material nonpublic information about Mylan’s unannounced earnings, drug approvals by the U.S. Food and Drug Administration, and impending merger with a division of Pfizer Inc. from his friend, a Mylan insider. The complaint alleges that Mallu traded on that information, and shared a portion of his trading profits with the Mylan insider by making cash payments in India.
“As alleged in our complaint, Mallu exploited his access to valuable information concerning Mylan’s earnings information, drug announcements, and merger plans to place highly successful options trades,” said Scott A. Thompson, Co-Acting Regional Director of the SEC’s Philadelphia Regional Office. “But Mallu’s efforts to conceal his scheme through secure messaging apps and foreign cash payments were unavailing, as this case highlights the agency’s ability to use sophisticated data analysis to detect suspicious trading patterns and identify the traders behind them.”
The SEC’s complaint charges Mallu with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mallu has consented to the entry of a judgment which, if approved by the court, would permanently enjoin him from violating the charged provisions and bar him from acting as the officer or director of a public company, with civil penalties, if any, to be decided later by the court.
In a parallel action, the U.S. Department of Justice, Fraud Section, today announced criminal charges against Mallu.
The SEC’s investigation, which is continuing, is being conducted by Christine R. O’Neil, Matthew B. Homberger, Brian R. Higgins, Oreste P. McClung, and Christopher R. Kelly of the Philadelphia Regional Office and John S. Rymas of the Market Abuse Unit and supervised by Brendan P. McGlynn, Jennifer Chun Barry, and Mr. Thompson. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the Options Regulatory Surveillance Authority.