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Biotech CEO Nader Pourhassan, 62, of Lake Oswego, Oregon, was sentenced Friday in a securities fraud scheme in which he misled investors about his company’s development of a new drug, then sold his shares at artificially inflated prices, pocketing $4.4 million.
Biotech CEO Sentenced Over Securities Fraud
During his trial, it emerged that Pourhassan was the Chief Executive Officer of CytoDyn, a publicly traded company based in Vancouver, Washington, that was developing an investigational drug to treat HIV and COVID-19.
Between 2018 and 2021, he intentionally misled investors about the drug’s prospects for FDA approval to artificially inflate the price of CytoDyn’s stock and attract new investors.
After making false announcements to investors, Pourhassan sold his 4.8 million shares of CytoDyn stock and pocketed $4.4 million.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division confirmed that Pourhassan lied to investors about the drug so he could engage in insider trading, exploiting a deadly public health crisis to intentionally deceive investors and the public out of millions to enrich himself.
Asst AG Duva said, “This type of fraud exploits vulnerable Americans, undermines the integrity of our financial markets, and erodes the trust that investors place in public companies.”
FBI, FDA-OCI, and the U.S. Postal Inspection Service investigated the case. Pourhassan was convicted in December 2024 of four counts of securities fraud, two counts of wire fraud, and three counts of insider trading.
At sentencing, U.S. District Judge Paula Xinis ordered him to pay more than $5.3 million in restitution and to forfeit more than $4.4 million. In addition, he was sentenced to 30 months in prison.
U.S. Attorney Kelly O. Hayes for the District of Maryland said, “This sentence makes clear, executives who mislead investors and manipulate the truth for personal gain will be held accountable.”
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