US securities regulators said they froze bank accounts containing more than $800,000 in illegal profits after a manager at Seattle Genetics gave his relative confidential information about drug trial results. The Securities and Exchange Commission complaint, which was filed January 19 and unsealed on Friday, says that Seattle Genetics Manager Zizhong (James) Fan told his relative Zishen (Brandon) Fan about positive trial results in the development of a drug used to treat Hodgkin's lymphoma.
The SEC said Zishen spent hundreds of thousands of dollars buying speculative stock options and common stock in the company. The stock value rose 18 percent when the news about the drug trial was made public in late September, the SEC said.
The SEC said it contacted the men on January 13. Shortly afterward, it said Zishen tried to wire several hundred thousand dollars to a bank in China. Zizhong told Seattle Genetics he had to leave for a trip to China, the SEC said. The SEC did not say if he left the United States, and did not specify their family relationship. Zizhong denied being related to or knowing Zishen, and Zishen denied knowing anyone at Seattle Genetics, the SEC said.
The SEC filed its complaint against both defendants in the US District Court for the Western District of Washington and got an order from a judge freezing the bank and brokerage accounts that held the profits. Calls to lawyers for Zizhong and Zishen were not immediately returned Friday.
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