Four Convicted in $600K Insider Trading Scheme — Don't Risk Your Savings

Former director of Chinook Therapeutics, Rouzbeh 'Ross' Haghighat, has been convicted alongside several others for misusing material non-public information related to a $3.2 billion merger with Novartis, which led to illicit profits exceeding $600,000.

A federal jury in New Jersey found four individuals guilty on charges of insider trading. The US Securities and Exchange Commission (SEC) also filed civil insider trading charges against Haghighat, his family members, and close friends in August, alleging they purchased securities ahead of the public announcement of the Chinook acquisition by Novartis.

'Haghighat abused his role as a senior corporate executive, breaching the trust and confidence placed in him by shareholders, to enrich himself and his friends and family,' stated Acting Assistant Attorney General Matthew Galeotti. 'He schemed together with his co-defendants to illegally profit from non-public, insider trading information. Today's verdict underscores the Criminal Division's commitment to aggressively prosecuting those who use deception to earn illicit gains at the expense of investors and undermine fairness in the economy.'

Haghighat shared confidential information about the acquisition with his stepdaughter, Kirstyn Pearl, and friends James Roberge and Syedfarbod 'Fabio' Sabzevari. All four purchased Chinook shares based on Ross's tip, profiting from the insider information.

'This is a classic example of greed overcoming honest business practices,' said Inspector in Charge Eric Shen of the US Postal Inspection Service Criminal Investigations Group. 'These defendants took advantage of insider information when they conspired to devise a scheme to provide protected information to co-conspirators for the purpose of enriching their lifestyles and padding their pockets. Their undoing came when they underestimated the resolve and tenacity of postal inspectors to bring to justice anyone who commits a crime against the public and the rule of law.'

Haghighat Convicted of 16 Counts of Insider Trading

In May 2023, Novartis confidentially proposed acquiring Chinook at a price per share higher than current trading levels. Evidence showed that 61-year-old Ross, based in Massachusetts, obtained sensitive merger details in the same month, subsequently purchasing shares and tipping his family and friends to do the same for personal benefit.

Following negotiations, the companies announced the deal publicly in June. The news triggered a rally in Chinook's stock, benefiting the insider traders.

Haghighat was convicted of one count of securities fraud, 16 counts of insider trading, and two counts of conspiracy. The other defendants faced similar charges, including securities fraud, insider trading, and conspiracy. They are scheduled for sentencing on 4 May 2026.

Haghighat faces a maximum sentence of 380 years in prison, while the others face jail terms between 60 and 160 years. A federal district court judge will determine the final sentences.

Prioritise Due Diligence Before Investing

While many investors focus on company fundamentals, stock price trends, and long-term prospects before investing, few consider the track record of senior management. A company might boast a strong product, a solid balance sheet, and positive outlooks, but leadership misconduct or non-compliance with regulation could jeopardise its growth trajectory.

Evaluating the history of each board member and senior executive — their contributions, past experience, and future ambitions — is crucial. This diligence helps ensure that leadership is committed to steering the company towards long-term success, rather than seeking personal gains at the expense of investor confidence.

In an era where corporate misconduct can rapidly erode trust and value, proper due diligence remains an essential part of safeguarding your investments. Investors should remember that behind every headline of success, there's often an underlying need to scrutinise leadership integrity and ethical standards.

Disclaimer: Our digital media content is for informational purposes only and is not investment advice. Please conduct your own analysis or seek professional advice before investing. Investments are subject to market risks, and past performance does not guarantee future results.