The High Court yesterday upheld a not-guilty ruling in an insider trading case involving OBI Pharma chairman Michael Chang (張念慈) and four of the company’s executives.
The high court upheld the Shilin District Court’s ruling in June 2019 that there was insufficient evidence showing that Chang, general manager Amy Huang (黃秀美), former vice chairman Hsu Yo-gung (許友恭), research and development director Yu Cheng-te (游丞德) and administration division manager Liao Tsung-chih (廖宗智) committed insider trading.
The ruling can be appealed.
Photo: CNA
Prosecutors first filed insider trading charges against the five in January 2017 based on provisions of the Securities and Exchange Act (證券交易法).
Shilin prosecutors alleged that the five learned at an internal meeting in August 2015 that the results of a double-blind clinical trial for OBI-822, a therapeutic breast cancer vaccine the company had developed, were unsatisfactory.
They then sold their shares in the company from September 2015 to January 2016 to avoid potential losses before the results were officially announced in February 2016, prosecutors said.
However, the Shilin District Court ruled that insufficient information was provided at the meeting to give participants the ability to determine whether the drug would meet the clinical trial’s expectations or be effective.
It therefore concluded that the five did not contravene Article 157-1 of the act, which forbids people holding senior posts in a company to sell their shares in the company “upon actually knowing of any information that will have a material impact on the price of the securities of the issuing company.”
Prosecutors later appealed the case at the High Court.
In response to yesterday’s ruling, OBI Pharma thanked the court for its decision.
It said in a statement that clinical trials for new drugs are a highly specialized field, so prosecutors were confused and made false accusations against the company’s executives.
The company called on prosecutors not to appeal the case again to avoid wasting time and money, while pledging that it would continue to develop drugs to prove its capability in the field.
OBI Pharma announced late last year that it would be proceeding with a phase 3 clinical trial of OBI-822.
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