BOSTON — Two Massachusetts men are among five people indicted in an insider trading scheme that reached the West Coast, federal justice department officials said Friday.
Rouzbeh “Ross” Haghighat, 61, of West Newbury, and James Roberge, 70, of Westford, are among those accused of allegedly profiting more than $600,000 by unlawfully buying the securities of a biopharmaceutical company in Seattle, Washington where Haghighat served as director, in 2023, Department of Justice officials said in a statement.
Haghighat is listed as chair of the Board of Directors for Sernova, a biopharmaceutical company headquartered in Ontario, Canada, according to the company’s website.
Three others also charged in the case are Behrouz “Bruce” Haghighat, 60, of Laguna Niguel, California; Kirstyn Pearl, 35, of Aguadilla, Puerto Rico; and Seyedfarbod “Fabio” Sabzevari, 31, of North Hollywood, California.
“The defendants were charged yesterday for allegedly trading on inside information and reaping hundreds of thousands in illicit profits,” Matthew Galeotti, Head of the Justice Department’s Criminal Division, said in a statement on Friday.
“Securities fraud and insider trading distort our financial markets and disadvantage Americans who play by the rules,” Galeotti said. “These charges demonstrate that the Criminal Division is committed to maintaining the integrity of markets by holding accountable all those who defraud investors.”
Ross Haghighat was charged with one count of securities fraud, 16 counts of insider trading, and two counts of conspiracy, officials said. He was previously charged with one count of conspiracy to commit insider trading.
Roberge and Sabzevari were both charged with one count of securities fraud and seven counts of insider trading.
Bruce Haghighat and Pearl were each charged with one count of securities fraud, one count of insider trading, and one count of conspiracy.
On Jan. 30, a Biospace.com press release announced Ross Haghighat as board chairman and a change of name to Sernova Biotherapeutics.
The press release describes the company as “a leading regenerative medicine company focused on developing its Cell Pouch bio-hybrid organ as a functional cure for Type 1 diabetes.”
“With a proven track record in driving successful innovations, strategic growth and mergers and acquisitions in the biotechnology and life sciences sectors, Mr. Haghighat brings a wealth of financing and deal experience to Sernova’s Board and leadership team,” the press release states.
According to court documents, between May and June 2023, the five accused insider traders “traded securities based on material nonpublic information about another pharmaceutical company’s (Company-2) proposed acquisition of Company-1.”
The indictment alleges that, in May 2023, Company-2 made a confidential proposal to acquire Company-1 at a price per share above the then current market value. The two companies then negotiated an agreement for the acquisition, which was announced in June 2023, causing the share price to spike.
“This case makes one thing clear: if you think you can game the system using insider information, think again,” Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group said in a statement.
“Ross Haghighat and his associates thought they were above the law and colored outside the lines for financial gain, but yesterday’s indictment proves no one is above the law,” Shen said. “The U.S. Postal Inspection Service will not hesitate to pursue and bring to justice anyone who tries to corrupt the integrity of our financial markets.”
Prosecutors said in his position as a director on the board of Company-1, Ross Haghighat allegedly obtained material nonpublic inside information about its acquisition, including sensitive deal terms.
He then allegedly purchased securities, and tipped others — including Bruce Haghighat, Pearl, Sabzevari, and Roberge — for personal benefit “with the expectation that they would purchase securities, which the defendants allegedly did,” prosecutors said.
If convicted, each defendant faces a maximum penalty of 25 years in prison on the securities fraud charge and 20 years in prison on each of the insider-trading charges.
If convicted of conspiracy, Ross Haghighat, Bruce Haghighat, and Pearl face a maximum penalty of 25 years in prison.
The U.S. Postal Inspection Service is investigating the case.
This is a developing story. Check back for updates as more information becomes available.
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