A former biopharmaceutical executive has agreed to pay nearly $156,000 to resolve U.S. Securities and Exchange Commission (SEC) allegations that he engaged in insider trading by purchasing shares of Cleveland BioLabs Inc. and its shareholder, Immune Therapeutics, before the announcement of a merger deal.
In a ruling issued Thursday by a Florida federal court, U.S. District Judge T. Kent Wetherell II ordered Curt L. Dewitz, 52, to pay a civil penalty of over $70,000, which matches the profits he allegedly gained from the illegal trading activity. Dewitz is also required to pay $15,000 in prejudgment interest, according to the court’s order.
While Dewitz did not admit or deny the SEC’s allegations, he consented to the judgment. The SEC had accused Dewitz of improperly trading shares of Cleveland BioLabs and Immune Therapeutics in advance of the October 2020 announcement that Cytocom Inc. planned to acquire Cleveland BioLabs through a reverse merger.
The SEC claimed that Dewitz made multiple stock purchases in Cleveland BioLabs over several months leading up to the announcement, using multiple trading accounts. He also bought Immune Therapeutics shares the day before the merger news broke. The SEC noted that the acquisition deal was favorable to Immune Therapeutics.
