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Avtar Singh Dhillon, 61, who now lives in California, faces potentially years in prison and millions in fines when he pleads guilty to the three felony securities violations, the US Attorney for Massachusetts said. Dhillon's attorney, who helped him unload the stocks, also plans to take a plea in the case, authorities said. Federal authorities arrested him last year.
Investigators said Dhillon, a Canadian-born doctor, moved 2.75 million shares of the company's stock into an LLC that his attorney created so he could sell them without the SEC knowing, the federal prosecutor said. They made $1.34 million in the sale but didn't disclose that to federal regulators, authorities alleged.
Directors of a company are required to tell federal authorities anytime they sell the company's stock as they have insider information.
The charge of failure to disclose sales can fetch up to a 20-year prison sentence and a $5 million fine. A plea hearing will be scheduled to determine Dhillon's punishment.
Dhillon was also charged with failing to disclose a payment he made to a newsletter writer to promote his health company's stock, which boosted the price, federal investigators said. The cases are not related.
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