SEC v. George N. Demos, No. LR-26262, Southern District of California (Mar. 10, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26262 / March 10, 2025 Securities and Exchange Commission v. George N. Demos, Case No. 3:25-cv-00539 (S.D. Cal. filed Mar. 7, 2025) SEC Charges Former Biopharmaceutical Company Vice President with Insider Trading On March 7, 2025, the Securities and Exchange Commission filed charges against George Demos, a former Vice President of Drug Safety and Pharmacovigilance at Acadia Pharmaceuticals Inc., for insider trading in advance of Acadia’s March 8, 2021 announcement of negative news from the FDA regarding Acadia’s supplemental new drug application to approve its Parkinson’s disease psychosis drug to treat an additional psychosis. According to the complaint, in July 2020, the FDA accepted Acadia’s application and told Acadia that, if no major deficiencies were identified, the FDA planned to communicate proposed labeling by March 3, 2021. The complaint alleges that the FDA instead notified Acadia on March 3, 2021, that proposed labeling would not be forthcoming due to deficiencies in the application. The complaint alleges that on the morning of March 8, 2021 Demos, based on material nonpublic information he had learned that made him increasingly confident that the FDA was not going to communicate labeling information, exercised nearly all of his vested Acadia stock options and immediately sold his shares. Later, after the close of trading on March 8, 2021, Acadia allegedly announced the FDA’s March 3 communication, and the following day its share price closed about 45 percent lower than the closing price on March 8. The SEC alleges Demos avoided losses of about $1.3 million. The SEC's complaint charges Demos with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without denying the allegations in the SEC's complaint, Demos has consented to entry of a judgment permanently enjoining him from violating the charged provisions, prohibiting him from serving as an officer or director of a public company for five years, and authorizing the court to determine the amount of disgorgement and prejudgment interest he shall pay, and whether a civil penalty is appropriate and, if so, the amount of the penalty. The settlement is subject to Court approval. In a parallel action, the U.S. Attorney's Office for the Southern District of California filed criminal charges against Demos. The SEC's investigation was conducted by L. James Lyman and Marisa Westervelt and supervised by Victoria A. Levin of the Los Angeles Regional Office. The litigation will be led by Charles Canter and supervised by Douglas Miller.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26262 / March 10, 2025 Securities and Exchange Commission v. George N. Demos, Case No. 3:25-cv-00539 (S.D. Cal. filed Mar. 7, 2025) SEC Charges Former Biopharmaceutical Company Vice President with Insider Trading On March 7, 2025, the Securities and Exchange Commission filed charges against George Demos, a former Vice President of Drug Safety and Pharmacovigilance at Acadia Pharmaceuticals Inc., for insider trading in advance of Acadia’s March 8, 2021 announcement of negative news from the FDA regarding Acadia’s supplemental new drug application to approve its Parkinson’s disease psychosis drug to treat an additional psychosis. According to the complaint, in July 2020, the FDA accepted Acadia’s application and told Acadia that, if no major deficiencies were identified, the FDA planned to communicate proposed labeling by March 3, 2021. The complaint alleges that the FDA instead notified Acadia on March 3, 2021, that proposed labeling would not be forthcoming due to deficiencies in the application. The complaint alleges that on the morning of March 8, 2021 Demos, based on material nonpublic information he had learned that made him increasingly confident that the FDA was not going to communicate labeling information, exercised nearly all of his vested Acadia stock options and immediately sold his shares. Later, after the close of trading on March 8, 2021, Acadia allegedly announced the FDA’s March 3 communication, and the following day its share price closed about 45 percent lower than the closing price on March 8. The SEC alleges Demos avoided losses of about $1.3 million. The SEC's complaint charges Demos with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without denying the allegations in the SEC's complaint, Demos has consented to entry of a judgment permanently enjoining him from violating the charged provisions, prohibiting him from serving as an officer or director of a public company for five years, and authorizing the court to determine the amount of disgorgement and prejudgment interest he shall pay, and whether a civil penalty is appropriate and, if so, the amount of the penalty. The settlement is subject to Court approval. In a parallel action, the U.S. Attorney's Office for the Southern District of California filed criminal charges against Demos. The SEC's investigation was conducted by L. James Lyman and Marisa Westervelt and supervised by Victoria A. Levin of the Los Angeles Regional Office. The litigation will be led by Charles Canter and supervised by Douglas Miller.