Risk & Compliance

Ex-Pfizer Employee Accused of Insider Trading

Michael Maciocio allegedly misused confidential information about potential Pfizer deals to make trades himself and tip off a stockbroker friend.
Matthew HellerJune 3, 2016

A former Pfizer employee orchestrated an insider trading scheme that netted more than $300,000 in illicit profits for himself and a former Oppenheimer stockbroker who was his childhood friend, the U.S. Securities and Exchange Commission said Friday.

In a civil complaint, the SEC alleged Michael Maciocio, 46, provided material nonpublic information about Pfizer’s potential deals with other pharmaceutical companies to David Hobson, his friend and long-time broker.

“Maciocio tipped Hobson in exchange for personal benefits to Maciocio, including investment advice, and also as a gift to Hobson,” the complaint said.

Maciocio allegedly made about $116,000 in illegal profits trading in such pharmaceutical companies as Medivation, Ardea Biosciences, and Furiex Pharmaceuticals between 2008 and 2014, while Hobson allegedly used the tips from his friend to realize at least $187,000 in illicit profits for himself and $145,000 for his customers.

Hobson, 47, was arrested Friday in a parallel criminal securities fraud case. Maciocio last month pleaded guilty and admitted to participating in the scheme.

“We allege that Maciocio and Hobson engaged in a multi-year insider trading scheme by repeatedly using the confidential information of Maciocio’s employer to place illicit trades,” Joseph G. Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit, said in a news release. “Given his years of experience in the securities industry, Hobson’s misuse of this highly sensitive corporate deal information represents an especially egregious violation of the law.”

According to the SEC, Maciocio and Hobson played Little League baseball together and went to the same high school in Rhode Island. In the mid-1990s, Maciocio opened a brokerage account at Oppenheimer, where his friend was working at the time, later following Hobson after he moved to RBC Capital Markets in 2010.

Maciocio’s duties at Pfizer allegedly included evaluating its capacity to make drugs being developed by companies it was considering as acquisition targets or business partners. The SEC said he began trading on, and tipping Hobson to, inside information in 2008 after learning that Pfizer was exploring a licensing deal with Medivation.

Pfizer, Oppenheimer, and RBC were not named in court papers but Reuters said the companies confirmed they employed Maciocio and Hobson.