By David Ruiz, From The Recorder

SAN FRANCISCO — The U.S. Securities and Exchange Commission on Tuesday announced insider-trading charges against the former information-technology director of a San Diego biotech firm, alleging he tipped his brother-in-law stockbroker to significant advances in the company’s pharmaceutical trials and later to its acquisition deal with AstraZeneca PLC.

The SEC accused Michael Fefferman of passing information related to his employer, Ardea Biosciences Inc., to his brother-in-law Chad Wiegand. The SEC also accuses Wiegand’s friend and fellow stockbroker Akis Eracleous of trading on the information. The trades resulted in about $530,000 in illegal profits, the SEC alleged in the suit filed Tuesday in federal court in San Diego.

The three have agreed to settle the case, the agency said, but a related criminal prosecution is pending against the two stockbrokers.

Fefferman is represented by John Kirby, a former federal prosecutor, Wiegand is represented by Joseph McMullen, and Eracleous is represented by Jeremy Warren of Warren & Burstein. The defense attorneys, all based near San Diego, did not immediately return calls for comment.

AstraZeneca acquired Ardea Biosciences in 2012 for $1.26 billion. Ardea is currently developing two products for gout treatment and is also developing an experimental cancer treatment under a global license agreement with Bayer HealthCare.

Fefferman served as a senior director of information technology for Ardea Biosciences from 2007 to 2014. The SEC’s complaint claims Fefferman alerted his brother-in-law to upcoming pharmaceutical trials, the Bayer agreement and the eventual sale of the company. Wiegand acted on that nonpublic information to purchase Ardea stock in multiple customer accounts and also shared the information with Eracleous, the SEC complaint says.

Wiegand, a 42-year-old Lakeside resident currently managing investments for his clients through his own business called Wiegand Asset Management, and Eracleous, 48, of San Diego, have agreed to be barred from the securities industry. They were both working for an unnamed broker at the time.

The SEC is asking that Wiegand and Eracleous give up the illegal profits, with interest, and that all defendants pay civil penalties. The settlement is subject to court approval.

David Axelrod and Michael Rinaldi of the SEC’s Philadelphia office are leading the litigation for the agency. The criminal case is being handled by the U.S. Attorney’s Office for the Southern District of California.

U.S. Securities and Exchange Commission building Photo: Diego M. Radzinschi

For more on this story go to: http://www.therecorder.com/id=1202728894840/Biotech-Worker-Stockbrokers-Hit-With-InsiderTrading-Charges#ixzz3cgNu6TOd