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Dale Chappell, who currently lives in Switzerland faces charges of securities fraud and insider trading, U.S. Attorney Philip Sellinger said. Chappell was formerly the chief scientific officer and member of the board of directors of Humanigen, a publicly traded clinical-stage biopharmaceutical company with offices in Short Hill, Sellinger said.
Chappell was arrested on Friday, Dec. 20 in Switzerland, Sellinger said. The United States will seek Chappell’s extradition to stand trial in New Jersey, Sellinger said.
Between June and August of 2021, Chappell avoided more than $38 million in losses by selling millions of shares of Humanigen stock, while having nonpublic information that the Food and Drug Administration was unlikely to issue emergency use authorization for a COVID-19 treatment drug the company had developed, Sellinger said.
After Humanigen publicly announced that the FDA had declined EUA approval for Lenzilumab, Humanigen’s stock price declined approximately 50%, Sellinger said. The company filed for bankruptcy earlier this year and its stock trades at 2 cents a share.
Chappell faces up to 20 years in prison if convicted, Selliger said.
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