Their lawyers did not immediately return calls seeking comment.
Prosecutors say the father and son used the proceeds from trading on inside information from November 2007 to this month to pay for travel and credit card bills and to buy new cars.
They allege Cheng Yi Liang repeatedly obtained inside information on when the agency would make a decision on drug applications and what that decision would be. He and his son would then use that information to purchase and trade the companies’ shares days ahead of the FDA’s formal announcement, according to the complaint.
In one example cited by the complaint, the men allegedly acquired 48,875 shares of Clinical Data Inc. after learning that the company’s antidepressant, Viibryd, was about to win approval. The drug was approved three days later, and the men sold their shares for a profit of more than $379,000, according to the complaint.
The FDA said in a statement that it was aware of the arrests. Cheng Yi Liang has worked for the FDA since 1996.
In a related action, the Securities and Exchange Commission filed civil insider-trading charges against Liang. The SEC is seeking unspecified restitution and fines against him.
