The feds are continuing to unravel a scheme to reap illegal profits off Merck’s $1.9 billion acquisition of Pandion Therapeutics, announcing new charges for the brother of one of the men first accused in July.
The Securities and Exchange Commission (SEC) alleges that Brian Wong made $400,000 after being tipped off to the deal early by his brother Brandon, according to a new complaint (PDF) unsealed in federal court on Thursday. Brandon was originally charged with insider trading along with his friend and former FBI trainee Seth Markin back in July.
That complaint alleged that Brandon and Markin made $1.3 million and $800,000, respectively, ahead of the February 2021 offer after Markin secretly reviewed material about the acquisition held by his then-romantic partner who worked as a lawyer on the deal. After getting a sneak peek at the details, Markin tipped off Brandon to the opportunity, the feds claim.
The charging documents detail how Markin reviewed details about the deal from a binder owned by his partner, whose apartment he was frequently staying at. From Feb. 1, 2021 to Feb. 23—two days before the deal was announced—Markin bought more than 2,200 shares of Pandion stock. According to the July complaint, Markin then relayed what he’d learned to Brandon Wong, who from Feb. 10 to Feb. 24 bought more than 35,000 Pandion shares.
The new documents claim that between Feb. 22 and Feb. 25, Brandon and Brian were exchanging messages about the potential deal, with Brandon assuaging his brother that the deal was likely to be announced at a conference on Feb. 25. From Feb. 22 to Feb. 24, Brian allegedly bought nearly 12,000 shares of Pandion. Further evidence of how loose-lipped this squadron was, the SEC claims Brian told two other individuals to invest in Pandion the day before the announcement, who collectively made some $2,000 in profits.
The deal that was announced included Merck acquiring all outstanding shares of Pandion for $60 per share, well above the $25.63 price the stock was at the day before. By the end of the day, Pandion’s share price was 133%, closing at $59.81.