Four individuals have now been sentenced for participating in an insider trading scheme that generated more than $600,000 in illegal profits ahead of a $3.2 billion pharmaceutical acquisition, closing a case that prosecutors say began inside the boardroom of a publicly traded biotechnology company.
The U.S. Department of Justice announced that Rouzbeh Ross Haghighat, a former member of the company’s board of directors, received a 40-month prison sentence after being convicted of securities fraud, insider trading, and conspiracy. Three people who traded after receiving confidential information from Haghighat also received prison terms. The sentences conclude one of the latest criminal insider trading prosecutions involving merger and acquisition information, an area that remains one of the Department of Justice’s highest enforcement priorities.
According to prosecutors, Haghighat learned confidential details of a proposed acquisition while serving on the board of a Seattle-based biopharmaceutical company during May 2023. Instead of maintaining confidentiality, the government alleged that he purchased securities himself and tipped friends and family members, allowing them to buy shares before the transaction became public.
Boardroom Information Became A Family And Friends Trading Network
The government said the scheme began after another pharmaceutical company submitted a confidential proposal to acquire the biotechnology company for approximately $3.2 billion.
As a board member, Haghighat allegedly received material nonpublic information about the negotiations, including the proposed purchase price and deal terms. Rather than keeping that information confidential, prosecutors said he shared it with three associates who also purchased securities before the acquisition announcement.
When the transaction became public in June 2023, the target company’s shares jumped sharply, allowing the group to generate more than $600,000 in combined profits.
| Defendant | Role | Sentence |
|---|---|---|
| Rouzbeh Ross Haghighat | Board director and source of inside information | 40 months |
| Seyedfarbod “Fabio” Sabzevari | Tipped trader | 14 months |
| Kirstyn Pearl | Tipped trader | 6 months |
| James Roberge | Tipped trader | 2 months |
Haghighat’s sentence was substantially longer because prosecutors identified him as the source of the confidential information rather than merely a recipient. In December 2025, a jury convicted him of one count of securities fraud, sixteen counts of insider trading, and two conspiracy counts following trial.
Assistant Attorney General A. Tysen Duva commented, “Rouzbeh Ross Haghighat abused his position as a board member of a publicly traded company to exploit his insider knowledge of an upcoming acquisition. He encouraged his friends and family to buy company shares so that they could reap hundreds of thousands of dollars off of that inside information to the detriment of investors.”
Mergers Remain The Largest Source Of Insider Trading Cases
The facts of the case illustrate why mergers and acquisitions continue to dominate insider trading enforcement.
Unlike earnings announcements or product launches, acquisitions often produce immediate double-digit share price movements once announced publicly. Because negotiations remain confidential for weeks or months, anyone with advance knowledge possesses information capable of producing significant trading profits.
Academic research and SEC enforcement data have consistently shown that takeover announcements remain among the most profitable categories of material nonpublic information.
| Corporate Event | Typical Market Impact | Why Regulators Monitor Closely |
|---|---|---|
| Mergers and acquisitions | Often immediate double-digit share price moves | Small leaks can produce significant profits |
| Earnings announcements | Large one-day price moves | Management and advisers receive advance information |
| Drug approvals | High volatility in biotech stocks | Clinical and regulatory information is highly restricted |
| Large commercial contracts | Can materially affect company valuations | Information often reaches employees months before disclosure |
Board members occupy one of the highest-risk positions because they routinely receive confidential information covering acquisitions, financings, executive changes, capital allocation, litigation, and strategic reviews before shareholders.
As a result, public companies generally impose strict blackout periods and insider trading policies that prohibit directors from trading while in possession of material nonpublic information.
Recent Cases Show Regulators Are Pursuing Every Type Of Insider Trading
The sentencing comes during one of the busiest periods for insider trading enforcement in recent months.
Over the past week alone, prosecutors and regulators have announced cases involving confidential merger negotiations, secondary stock offerings, engineering projects, and information allegedly obtained through personal relationships.
Although the sources of confidential information differ, the enforcement theory remains the same: investors who possess material nonpublic information cannot trade or pass that information to others who trade.
| Recent Enforcement Action | Source Of Inside Information | Alleged Illegal Profit |
|---|---|---|
| Board director sentencing | Confidential acquisition negotiations | More than $600,000 |
| Engineering manager indictment | Nuclear reactor restart project | About $1.48 million |
| New Jersey SEC case | Romantic partner’s confidential work files | About $2.7 million |
| Broker and traders guilty pleas | Secondary stock offerings | More than $1 million |
FinanceFeeds recently reported on criminal charges against a Constellation Energy engineering manager accused of trading before the Three Mile Island restart announcement, SEC allegations involving a trader who allegedly accessed confidential corporate information through his romantic partner, and guilty pleas by a broker and traders accused of exploiting confidential secondary offering information. Together, the cases demonstrate that enforcement agencies continue to pursue insider trading regardless of whether the information originates in corporate boardrooms, investment banks, engineering teams, or personal relationships.
The Department of Justice has increasingly coordinated criminal prosecutions with the SEC and the Financial Industry Regulatory Authority, allowing investigators to combine trading records, communications, brokerage data, and market surveillance tools when identifying suspicious trading activity around major corporate announcements.
Inspector in Charge Eric Shen of the U.S. Postal Inspection Service commented, “This case makes one thing clear: if you think you can game the system using insider information, think again. Ross Haghighat and his associates thought they were above the law and colored outside the lines for financial gain, but yesterday’s sentencing proves no one is above the law.”
Prison Sentences In The Insider Trading Scheme
| Defendant | Months In Prison |
|---|---|
| Rouzbeh Ross Haghighat | 40 |
| Seyedfarbod Sabzevari | 14 |
| Kirstyn Pearl | 6 |
| James Roberge | 2 |
Takeaway
The Haghighat case illustrates why merger negotiations remain one of the SEC’s and DOJ’s highest enforcement priorities. Board members routinely receive information capable of moving share prices long before public announcements, making corporate governance and insider trading controls critical to market integrity. The recent wave of prosecutions also shows that regulators are pursuing increasingly diverse sources of confidential information, from boardrooms and engineering departments to investment banks and personal relationships, while continuing to impose meaningful prison sentences on those who misuse it.
