by Anne E. Railton and Courtney D. Orazio
Insider trading has long been a key enforcement priority for the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ). The COVID-19 pandemic has caused market volatility not seen in decades, creating heightened concerns about insider trading that have only sharpened this focus. Life sciences companies—including biotechnology, pharmaceutical, medical device, and healthcare product and services businesses—are likely to be particular subjects of scrutiny. Already frequent targets of SEC and DOJ focus even before the pandemic, many life sciences companies on the frontlines of fighting COVID-19 have been privy to a regular stream of material COVID-related, market-moving information. The ongoing opportunities for breakthroughs in responding to the pandemic create opportunities for lucrative trading, too—and regulators and prosecutors have taken notice. Life sciences companies, along with their executives and directors, have already—and will continue to—face scrutiny arising out of event-driven trading issues relating to COVID-19 diagnostics, treatments, and vaccines.