Zizhong (James) Fan, a former Seattle Genetics employee who was suspected of leaking insider information on clinical trials at the Bothell company, was planning on catching a flight back to Seattle to appear in U.S. District Court April 15.
A New Jersey Port Authority official told the Reporter that Fan jumped to his death April 14 from the fourth floor of the parking garage at Newark Liberty International Airport at about 8 p.m.
“It’s an unfortunate tragedy,” said Fan’s lawyer, Adam Braun, of Los Angeles. “In the end, he couldn’t face the prospect of being deported or being separated from his children (if convicted).”
Braun said that Fan had a temporary job at a biotech company in New Jersey for the last month while his wife and two children, 3 and 7 years old, were still residing in Bothell.
In court documents obtained by the Reporter, FBI special agent T. Ryan Austin states the FBI had obtained a 13-count securities-fraud indictment against Fan and his brother, Zishen (Brandon) Fan, of Chino Hills, Calif., April 13. Charges could result in up to 10 years in prison and a fine of up to $250,000. According to Braun, Fan’s lawyer since January, he could have been deported back to his homeland of China if convicted.
A court clerk told the Reporter April 21 they had dismissed the charges against Zizhong Fan, but Zishen Fan is still being charged in that case. Zishen Fan, 38, appeared April 15 before U.S. Magistrate Judge James Donohue in Seattle.
Beginning in or about June 2010 and continuing through January 2011, the two engaged in a scheme to commit securities fraud, the complaint reads.
Zizhong Fan, who worked at Seattle Genetics for about 2 1/2 years as a senior statistical analysis system programmer and manager of clinical programming, had access to nonpublic information regarding the progress of clinic trial results for a drug the company planned to submit for approval to the Federal Drug Administration. The drug developed was for use by patients with Hodgkin’s lymphoma.
“In violation of his duties of trust and confidence, James shared this material insider information with Zishen, and the two individuals, utilizing a brokerage account in the name of a third party, deceptively traded in options and common stock of Seattle Genetics for their benefit, generating more than ($800,000) of illicit profits,” the complaint reads.
“Seattle Genetics has always taken compliance and insider trading laws seriously,” said company spokesperson Peggy Pinkston, who added that Seattle Genetics extends its condolences to Zizhong Fan’s family. “We have an insider trading policy on which all employees are trained and we have a strong compliance culture.”
According to the charges and a lawsuit filed by the Securities and Exchange Commission (SEC), Zishen Fan spent hundreds of thousands of dollars purchasing speculative stock options in the company, as well as common stock, which skyrocketed in value when the news became public in late September 2010. Zizhong Fan is believed to have traveled to China from Vancouver, B.C., in January, where he allegedly attempted to transfer several hundred thousand dollars from an Ameritrade account to a Chinese bank account in his mother’s name. He returned to the U.S. later that month after these transfers were blocked.
— The Seattle Times contributed to this report.
