By Dow Jones Business News, September 30, 2013, 05:05:00 PM EDT
By Michael Calia
A former adviser and executive with a global wealth management firm pleaded guilty Monday in federal court to insider-
trading charges related to Gilead Sciences Inc.'s ( GILD ) $11 billion acquisition of Pharmasset Inc.
The Justice Department said Kevin Dowd, 38, of Boca Raton, Fla., used nonpublic information about the impending deal
to tip off two investors who made about $700,000 in total profit off of trades based on the tips.
Mr. Dowd, in turn, admitted that he made $35,000 for passing along the information, the department said.
An attorney for Mr. Dowd couldn't be reached for comment.
According to the Justice Department, a board member of Pharmasset was the largest customer of the wealth management
firm for which Mr. Dowd worked. The board member told his advisers at the Aventura, Fla., branch where Mr. Dowd worked
of Gilead's upcoming offer for his company, the department said.
On Nov. 18, 2011, three days before the offer was announced, Mr. Dowd told two investors, one of whom is a childhood
friend, about the proposed deal, and they subsequently bought Pharmasset stock and options, according to the Justice
Department. The offer was for $137 per share in cash, representing a premium of about 89% over Pharmasset's closing
price on Nov. 18, the department added.
The investors then liquidated their positions after the deal was announced, the department said.
The name of the wealth management firm wasn't disclosed. Mr. Dowd, a former vice president and portfolio manager at
the branch in question, worked there from 2005 through late October 2012, the Justice Department said.
Mr. Dowd faces a maximum sentence of five years in prison and a fine of $250,000. His sentencing is scheduled for Jan.
Write to Michael Calia at firstname.lastname@example.org
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