We’ve blogged a few times about New York’s Martin Act and the NY AG’s eagerness to capitalize on statute’s seemingly limitless scope (see 2nd & 3rd blogs). Last week, the NYT reported that NY AG Letitia James has recently trotted out the Martin Act to target an area usually addressed by the feds – insider trading. Here’s an excerpt:

Attorney General Letitia James of New York filed an insider trading lawsuit on Thursday against a former biotech chief executive, accusing him of turning a $7.6 million profit on the sale of the company’s stock before the public learned that millions of doses of a Covid-19 vaccine were contaminated.

Filed in a New York State court, the lawsuit said that Robert G. Kramer, who was the chief executive of Emergent BioSolutions, knew of the systemic problems involving a vaccine it was helping AstraZeneca produce as part of the federal government’s Operation Warp Speed when he exercised his stock options.

The vaccine makers had to discard the tainted material and suspend production, sending Emergent’s stock into a free fall from its high of $134.46 a share in August 2020, according to the lawsuit.

Aside from the legal action against Mr. Kramer, who retired from Emergent in 2023, Ms. James announced on Thursday that the company, which is based in Gaithersburg, Md., would pay $900,000 as part of a settlement in connection with the insider trading case.

The Times says that the AG alleges that the former CEO’s conduct violated the Martin Act, while the former CEO denies wrongdoing. Interestingly, this isn’t the first time NY has used the Martin Act to target insider trading. In 2021, AG James used the statute to compel testimony and document production in an insider trading investigation aimed at Eastman Kodak.

– John Jenkins