Dr. Daniel V.T. Catenacci – Fraud and Other Crimes Exposed (2023)
The U.S. Attorney’s Office in Chicago has filed a federal criminal complaint alleging that a Chicago physician Dr. Daniel V.T. Catenacci used insider knowledge to buy shares of a California-based biotechnology business before the company made public encouraging findings from a clinical study of an investigational cancer medication.
Daniel V.T. Catenacci is a gastrointestinal medical oncologist in Chicago who served as one of the clinical study’s lead investigators and field principals.
Through this position, it is claimed that Dr. Daniel V.T. Catenaccii was given access to private data regarding the organization and the outcomes of its clinical trials.
Criminal complaint submitted Against Dr. Daniel V.T. Catenaccii
A criminal complaint submitted to U.S. District Court in Chicago alleges that Dr. Daniel V.T. Catenaccii made more than $134,000 in unlawful gains from the buying and selling of the company’s assets in November 2020 by using significant, secret knowledge about the trial’s outcomes.
Prior to the business disclosing encouraging trial outcomes, Dr. Daniel V.T. Catenaccii bought more than 8,000 shares, which he later sold, according to the report. According to the facts, Dr. Catenacci’s shares have tripled or quadrupled in value throughout this time.
Dr. Daniel V.T. Catenaccii, 45, of Chicago, is accused of committing securities fraud on one count in the information. Up to 20 years in federal prison are possible sentences for the offense. It has not yet been set for arraignment in federal court in Chicago.
The accusation was made by Emmerson Buie, Jr., Special Agent-in-accusation of the FBI’s Chicago Field Office, and John R. Lausch. The U.S. Securities and Exchange Commission was really helpful. The government is represented by Assistant U.S. Attorney Brian Havey.
It is emphasized to the public that knowledge does not imply guilt. The burden of proof is on the government to establish the defendant’s guilt beyond a reasonable doubt in a fair trial, during which the defendant is deemed innocent.
Trainee FBI and Merck
Seth Markin, 31, a former FBI trainee, was charged in one of the indictments. When Markin’s ex-girlfriend was a lawyer working on Merck’s acquisition of Pandion Therapeutics, she provided him with information in secret. Without her consent, Markin reportedly looked through his ex-girlfriend’s private papers. Markin, along with co-defendant Brandon Wong, 38, gave the information he obtained to at least 20 persons who made millions of dollars. The proceeds from Markin and Wong’s unlawful trading were more than $1.4 million.
When questioned by the FBI, Markin stated that he was unaware that his girlfriend was working on the merger and that he had learned of the potential agreement on social media. In addition to a number of counts of securities and tender offer fraud, Markin and Wong are accused of attempting to commit the crimes.
The indictment did not name Markin’s previous partner. Her employment was only identified as a major Washington, D.C., legal firm in the documents. In the acquisition of Pandion for $1.85 billion, Merck was represented by Covington & Burling. The transaction was finished by Merck in April 2021.
Dr. Daniel V.T. Catenaccii, a former investigator in the Five Prime Trial
Dr. Daniel V.T. Catenaccii agreed on a partial settlement of the civil accusations on December 20, 2021, paying a civil fine based on the trading profits. Around the same time, Catenacci was accused of trading as an insider in securities by the U.S. Attorney’s Office. Catenacci pleaded not guilty to the charge.
Now that Catenacci might receive a 25-year jail term, he and his lawyer are arguing that he shouldn’t spend any time behind bars and instead should be placed on two years probation in addition to the time already spent. This accusation was suggested by the U.S. Probation Office, according to records submitted. Defense lawyers said Catenacci “deeply regrets his conduct” and that a non-custodial sentence is “in the public’s best interest” so he may carry on with his oncology practice.
As stated in the court papers, “Dr. Daniel V.T. Catenaccii is a first-time offender who promptly accepted the blame for his actions, cooperated with the government, and has already satisfied his forfeited obligation.”
Dr. Daniel V.T. Catenaccii apparently received an email in November 2020 from Five Prime’s chief medical officer informing him that he was unable to trade due to the non-public intermediate Phase II results. In court records, Catenacci claims he didn’t read the email in its entirety and mistakenly believed “he was not to communicate to others the private data he was given from Five Prime.”
After Five Prime released the information, Dr. Daniel V.T. Catenaccii sold his shares, making a profit of about $134,000 in just one day. Six months later, the FBI went to see Catenacci, who immediately submitted a personal check for the sum in question to the U.S. Marshals Service after confessing.
As a self-taught securities trader, Catenacci contends that he was unaware that he was breaking any laws at the time. Catenacci pleaded guilty in its entirety when the judge rejected the request. Five Prime was purchased by Amgen in March 2021 for $1.9 billion.
The Bottom Line
In a partial settlement of the civil charges, the oncologist Dr. Daniel V.T. Catenaccii agreed to pay a civil penalty for the proceeds of the trading, according to a statement made by the Securities and Exchange Commission. According to SEC, a total of $134,142 was made from the trade. According to the agency, the penalty’s exact amount is yet unknown. A similar Department of Justice lawsuit against Catenacci for one count of securities fraud through insider trading was filed on the same day by the U.S. Attorney’s Office for the Northern District of Illinois. To answer to the criminal charge, Catenacci entered a plea of innocence.