A former information technology executive at Mylan pleaded guilty on Friday to insider trading for using tips from the drugmaker’s chief information officer (CIO) to trade in its stock, generating $4.27 million of illegal profit, authorities said.
Dayakar Mallu, 51, admitted to conspiring to commit securities fraud, and to an unrelated charge of helping prepare a false tax return, before U.S. District Judge W. Scott Hardy in Pittsburgh.
Mylan is now known as Viatris Inc. after merging last November with Pfizer’s Upjohn off-patent drug business, which Pfizer spun off. The combined company’s headquarters remain in Canonsburg, Pennsylvania, a Pittsburgh suburb.
Authorities said that between October 2017 and July 2019, Mallu traded Mylan stock based on material nonpublic information about the company’s results, Food and Drug Administration drug approvals, and the Upjohn merger.
Mallu, now a resident of Orlando, Florida, was previously vice president of global operations information technology at Mylan, and had been a friend and colleague of the chief information officer, court records show.
The tax return charge related to a computer programming company based in Farmington Hills, Michigan, that Mallu owned, prosecutors said.
Mallu could face 57 to 71 months in prison under recommended federal guidelines at his Jan. 24, 2022, sentencing, according to a plea agreement with the Department of Justice.
He also agreed to forfeit $4.27 million and make restitution to the Internal Revenue Service, court records show. The Securities and Exchange Commission (SEC) filed related civil charges.
Aitan Goelman, a lawyer for Mallu, declined to comment.
Ramkumar Rayapureddy, who was Mylan’s CIO at the time of Mallu’s trading, now holds the same job at Viatris, according to Viatris’ website and his LinkedIn Page.
The SEC said Mallu shared some profits with the source of his inside information, who directed him to make cash payments in person, in India, to avoid detection.
Rayapureddy did not immediately respond to a request for comment.
In a statement, Viatris said: “The company is committed to the highest standards of integrity and compliance with the law. The company has been fully cooperating with the authorities. We are not in a position to comment further.”
