Selling ahead of bad news in the Spectrum Pharmaceuticals stock last year cost the Grewal couple — Shivbir and his wife Preetinder, $90,960.85 by way of disgorgement, pre-judgment interest and penalty.

The capital market regulator of the US, the Securities and Exchange Commission said that Shivbir Grewal, while serving as outside counsel to Spectrum Pharmaceuticals, last year learnt that the company was on the brink of announcing a significant decline in expected revenue due to an unanticipated drop in orders for its top-selling drug, Fusilev.

Non-public info & sale

Grewal sold his entire investment in the Spectrum stock within 48 hours of getting the non-public information from company officials who sought the disclosure advise of his law firm. He tipped his wife Preetinder Grewal, who also sold all of her Spectrum shares on the basis of the non-public information.

This amounted to insider-trading on client’s confidential information, the regulator said.

Stock slumps

The day after Grewal sold her stock, Spectrum issued a press release revealing the expectation of decreased sales of the drug Fusilev and the consequent expectation of reduced revenue.

Spectrum’s stock price fell in excess of 35 per cent and the Grewal couple avoided losses of nearly $45,000, charged by SEC.

The Grewals agreed to pay $90,000 to settle the SEC’s charges. Shivbir Grewal also agreed to be suspended from practicing as an attorney before the SEC on behalf of any publicly-traded company or other entity regulated by the agency.

Without admitting or denying the allegations, the Grewals agreed to be permanently enjoined from violating these provisions of the securities laws. The settlement is subject to court approval. Meanwhile, SEC’s investigation is continuing in its Los Angeles regional office.

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