Monthly Archives: July 2025

Insider Trading Enforcement and Litigation

Pharmaceutical VP Charged with Insider Trading After Dumping Shares

On March 7, 2025, the U.S. Securities and Exchange Commission (the “SEC”) charged George Demos, former Vice President of Drug Safety and Pharmacovigilance at Acadia Pharmaceuticals Inc. (“Acadia”) with securities fraud.[1] The SEC alleged that Demos traded Acadia securities based on material nonpublic information (“MNPI”) he had learned that made him increasingly confident of an adverse U.S. Food and Drug Administration (“FDA”) decision.[2]

According to the SEC’s complaint, in June 2020 Acadia submitted a supplemental application to the FDA seeking approval to expand the use of Nuplazid, Acadia’s prescription drug for the treatment of hallucinations and delusions caused by Parkinson’s disease, to similar symptoms caused by dementia.[3] Given that the population suffering from dementia-related psychosis is much larger than the population suffering from Parkinson’s-related psychosis, FDA approval to market Nuplazid for dementia-related psychosis would have greatly expanded the drug’s potential market.[4] Demos was one of eight people responsible for planning and developing responses to the FDA’s decision on the supplemental application.[5]

On March 3, 2021, the FDA notified Acadia that the supplemental application would not be successful.[6] The FDA’s response was not shared with Demos; however, according to the SEC, the passing of key deadlines and the postponement or cancellation of meetings relating to the supplemental application meant that Demos knew, or ought to have known, of the FDA’s adverse decision.[7]

On March 8, 2021, Demos exercised nearly all of his vested Acadia stock options and sold his shares in the company.[8] After market close on the same day, Acadia announced the FDA’s adverse decision, and the following day, Acadia’s share price closed down 45%.[9] The SEC alleged that, as a result, Demos avoided losses of approximately $1.3 million.[10]

The SEC charged Demos with violating Section 17(a) of the Securities Act of 1933, as amended (the “Securities Act”) and Section 10(b) of the Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 thereunder.[11] Demos reached a settlement with the SEC pursuant to which he was barred from serving as an officer or director of a public company for five years, and will pay a civil penalty, prejudgment interest, and disgorgement as determined by the court.[12] Demos also reached a plea agreement with the U.S. Attorney’s Office for the Southern District of California.[13]

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