Litigation Release No. 25660 / March 9, 2023
Securities and Exchange Commission v. Mahmoud Ali Abdelkader, No. 3:23-cv-01032 (N.D. Cal. filed Mar. 7, 2023)
The Securities and Exchange Commission announced today that California resident Mahmoud Abdelkader has agreed to settle charges for insider trading in the securities of Audentes Therapeutics, Inc. before the December 2, 2019 public announcement that Audentes would be acquired by Astellas Pharma, Inc. for approximately $3 billion.
According to the SEC’s complaint, Abdelkader’s wife worked for Audentes. The SEC alleges that Abdelkader determined, based on facts he learned from his wife, that there was a high likelihood of Audentes being acquired. Using this material nonpublic information he misappropriated from his wife, Abdelkader allegedly purchased short-term, out-of-the money Audentes call options on October 17 and October 18, 2019. The SEC further alleges that when Audentes’ stock price rose by approximately 106% following the acquisition announcement, Abdelkader obtained ill-gotten gains of approximately $81,580.
Abdelkader consented to the entry of a final judgment that would resolve all claims and permanently enjoin him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Abdelkader agreed to pay a civil money penalty of $81,580 and to disgorge his profits with prejudgment interest totaling $90,570. The settlement is subject to court approval.
The SEC’s investigation was conducted by Jason Schall, Lauren Poper and Wendy Kong. The case was supervised by Lisa Robertson, Melissa Armstrong and Melissa Hodgman. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.