Upper St. Clair man charged in connection with $8M insider trading scheme

The chief information officer for the pharmaceutical company formerly known as Mylan was charged Thursday in connection with an $8 million insider trading scheme.

Ramkumar Rayapureddy, 54, of Upper St. Clair, faces parallel actions filed by the U.S. Securities & Exchange Commission and the U.S. Department of Justice.

A Viatris spokesperson said that Rayapureddy is on leave and that the company takes the allegations against him very seriously.

“The company is committed to the highest standards of integrity and compliance with the law,” the spokesperson said. “We have and will continue to fully cooperate with the authorities.”

The criminal indictment, which was unsealed Thursday, charges Rayapureddy with conspiracy and securities fraud between 2017 and 2019.

The government said Rayapureddy provided former Mylan employee Dayakar R. Mallu with nonpublic, inside information that he received via his position. He gave the tips on at least three separate occasions after Mallu left the company, the SEC said. The two were close friends.

The government said the tips that Rayapureddy gave included information on FDA drug approvals, financial earnings and a merger with a division of Pfizer.

Mallu, who worked at Mylan until March 2017, used the tips to execute trades in the company’s securities and give kickbacks to Rayapureddy, the government said.

Mallu, 52, of Orlando, Florida, pleaded guilty to charges of conspiracy to commit securities fraud and aiding in the preparation of a false tax return last year. His sentencing has been postponed several times and is now set for Feb. 9 before U.S. District Judge W. Scott Hardy.

Following his plea, Mallu sought permission to travel to India and posted a nearly $1 million bond secured by his residence.

Hardy granted the motion. Court documents show he was to return to the United States by June 30.

According to the SEC filing against Rayapureddy, he was hired by Mylan in 2014 and promoted to global chief information officer in January 2016. He continues to hold the same position with Viatris, based in Canonsburg.

Court filings said Rayapureddy tipped Mallu off when Mylan was about to announce FDA approval of a generic multiple sclerosis treatment. Knowing the announcement would likely increase Mylan’s stock value, the government said, Mallu bought additional stock.

Subsequently, when Rayapureddy learned that Mylan was going to report financial losses on its 2018 earnings, likely leading to lower stock value, he told Mallu. Mallu then sold shares to avoid losses of $700,000, the SEC said.

In the spring of 2019, when Mylan was planning a merger with Upjohn, Rayapureddy was involved in the review process, the SEC said. He tipped Mallu off to the impending merger, and Mallu then bought additional stock in Mylan, profiting $2.2 million, the SEC said.