A United States-Nigerian citizen, Izunna Okonkwo, has been indicted alongside five other foreign nationals over an alleged $41m stock market fraud in the United States.
United States Department of Justice, in a statement on its website on Sunday, said that Okonkwo and the other defendants allegedly engaged in insider trading between June 2020 and February 2024.
The statement disclosed that the six suspects were charged on Friday for their participation in the years-long scheme to trade securities based on material non-public information.
The other defendants were identified by the statement to include Muhammad Saad Shoukat, 33; his brothers, Muhammad Arham Shoukat, 35, and Muhammad Shahwaiz Shoukat, 36 — all dual US-Pakistani citizens — and his friend, Daniyal Khan, 33, a dual UK-Pakistani citizen.
The statement explained the insider trading scheme, stating, “Kim worked at an investment bank that was actively involved in multiple mergers and acquisitions of publicly traded healthcare and biopharmaceutical companies.
“Kim obtained material non-public information about many of these pending deals, either by working on the deals directly or from others who did.
“Kim illegally shared the information about at least nine of these deals with Saad Shoukat, who traded on that information by himself and through others.
“Saad Shoukat also tipped off others—including Arham Shoukat, Shahwaiz Shoukat, Khan, and Okonkwo—who similarly traded and profited from the material non-public information. Overall, Saad Shoukat and his co-conspirators received illicit profits from the insider trading scheme totalling at least $41m.”
The statement further alleged that the defendants engaged in what it described as the Olema Manipulation Scheme, adding, “Saad Shoukat, Arham Shoukat, and others actively manipulated the stock price of Olema, a publicly traded company focused on developing breast cancer treatment through a drug called OP-1250.
“From the spring of 2021, Saad Shoukat and Arham Shoukat began investing in Olema stock and encouraged others to invest in it.
“After purchasing substantial stock in Olema, Saad Shoukat, Arham Shoukat, and others accessed confidential information showing that OP-1250 was less effective than they had hoped.
“They then falsified the OP-1250 data that the co-conspirators had illegally accessed and publicly disseminated it in a manner that made it appear authentic and as though it originated from Olema.
“The release of the false data—which inflated the drug’s perceived efficacy—temporarily caused Olema’s stock price to rise, during which Saad Shoukat, Arham Shoukat, and others profited and avoided losses by selling large volumes of Olema shares.”
The defendants were also alleged to have manipulated the stock price of Opiant, another publicly traded company involved in the development of opioid overdose treatment.
The statement added that the defendants were charged with offences bordering on stock manipulation, conspiracy, and insider trading, among others, noting that they face maximum prison sentences ranging from 20 to 25 years on each count if convicted.
Okonkwo is not the first Nigerian to be indicted for fraud-related allegations in the United States.
On December 4, and the US ordered the deportation of a Nigerian, Oluwaseun Adekoya, upon completion of a 20-year prison sentence for his role in a $2m fraud scheme.
US Department of Justice stated that Adekoya was sentenced after being found guilty of conspiracy to commit bank fraud, conspiracy to commit money laundering, and nine counts of aggravated identity theft following a three-week trial.
