A former Food and Drug Administration chemist was sentenced Monday to five years in prison and three years of supervised release for his involvement in a $3.7 million insider trading scheme, officials said.
Cheng Yi Liang, 58, of Gaithersburg, was sentenced in federal court in Greenbelt on charges of securities fraud and making false statements. He pleaded guilty to those charges in October, according to the Maryland U.S. Attorney’s Office.
According to a document filed as part of Liang’s guilty plea, Liang traded on the securities of pharmaceutical companies using insider information from about July 2006 to March 2011. He gathered FDA insider information about the time and substance of FDA announcements on experimental drugs and then used that information to have brokerage accounts he controlled buy and sell securities.
The insider trading led to profits and avoided losses of more than $3.7 million. Liang was previously ordered to forfeit $3.7 million, officials said.
Liang also failed to disclose his trading on these accounts in annual confidential fianancial disclosure forms he was required to fill out as an FDA employee, the document stated.
