Bristol-Myers Squibb Co. executive Robert Ramnarine was chargedwith insider trading for making $311,361 in illegal profit bybuying stock options in three companies targeted foracquisition.

The FBI arrested Ramnarine, 45, and he appeared today in federalcourt in Newark, New Jersey, where he was released on $250,000bond. Ramnarine's jobs included executive director of pensions andsavings investments and assistant treasurer for capitalmarkets.

He helped the New York-based drugmaker evaluate whether to buytargeted companies, including ZymoGenetics Inc., Pharmasset Inc.and Amylin Pharmaceuticals Inc., the Federal Bureau ofInvestigation said. As he conducted due diligence on pension andsavings plans of those companies, he also bought options in allthree, violating his duty not to profit from inside information,according to the FBI.

From his office in Princeton, New Jersey, Ramnarine alsoconducted Internet searches to determine whether he could bedetected by authorities, according to the Securities and ExchangeCommission, which sued him today. One search was on the term “canstock option be traced to purchase inside trading,” according tothe civil complaint.

“Ramnarine tried to educate himself about how the SECinvestigates insider trading so he could avoid detection,” DanielM. Hawke, chief of the SEC's Market Abuse Unit, said in astatement. “Our charges against Ramnarine should serve notice thatwhen you violate insider trading laws, no matter how you scheme,you will be caught.”

Ramnarine, of East Brunswick, New Jersey, faces three counts ofsecurities fraud, each carrying a maximum prison term of 20 years.The SEC seeks a court order to freeze his brokerage accountassets.

After Ramnarine's court appearance, Peter Carter, his assistantfederal public defender, declined to comment.

Bristol-Myers said Ramnarine was placed on administrative leaveeffective immediately.

Company Statement

Bristol-Myers agreed to buy ZymoGenetics in October 2010 andAmylin in June. It withdrew from talks on buying Pharmasset, whichGilead Sciences Inc. agreed to buy in November 2011 for $11billion.

Bristol-Myers fell the most in more than 10 years after itannounced late yesterday that a patient in a clinical trial for itsexperimental hepatitis C drug had developed heart failure. Thecompany halted testing of the drug.

Shares fell 8.6 percent to $32.55 at 4 p.m. New York time, aftergaining 27 percent in the previous 12 months. It was their worstone-day drop since April 2002.

Bristol-Myers has been acquiring companies and developing drugsto replace top-selling heart drug Plavix, which had $7.09 billionin sales last year. Bristol-Myers agreed to pay $5.3 billion forAmylin, and agreed to pay $885 million for ZymoGenetics.

Bristol-Myers reached a tentative agreement to buy ZymoGeneticson Aug. 12, 2010, triggering three weeks of due diligence,according to the FBI complaint.

Ramnarine bought ZymoGenetics options on Aug. 25 and 26, 2010,and sold on Sept. 8, the day after the deal was announced, for aprofit of $30,551, according to the FBI. In an application for onebrokerage account used for those trades, Ramnarine falsely statedthat he worked at Merck & Co., the FBI said.

Ramnarine was hired in December 1997 and worked from March 2008to June 2011 as director of pensions and savings investments. Hewas then promoted to executive director in that office. In July, hewas promoted again, to assistant treasurer for capital markets.

In April, he was responsible for advising Bristol-Myers on howthe Amylin transaction would affect the company's capitalstructure, cash flow and credit rating, according to the FBI. Healso spoke with the company's investment bankers at Citigroup Inc.and credit agencies. Ramnarine made $55,784 in illicit profit onthe deal, according to the FBI.

He also made $225,026 in illicit profit on the Pharmasset deal,buying some of his options on his work-issued BlackBerry, accordingto the arrest complaint.

The case is U.S. v. Ramnarine, 12-mj-8121, U.S. District Court,District of New Jersey (Newark).

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