Izunna Okonkwo, a dual United States–Nigerian citizen, has been indicted alongside five other individuals of different nationalities over an alleged $41 million stock market fraud uncovered by US authorities.
According to a statement published on the United States Department of Justice (DoJ) website on Sunday, Okonkwo and the other defendants are accused of engaging in a years-long insider trading and stock manipulation scheme that ran between June 2020 and February 2024.
The six suspects were formally charged on Friday for allegedly trading securities based on material non-public information and manipulating the share prices of publicly traded companies.
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The other defendants were identified as Muhammad Saad Shoukat, 33; his brothers, Muhammad Arham Shoukat, 35, and Muhammad Shahwaiz Shoukat, 36, all dual US-Pakistani citizens and their associate, Daniyal Khan, 33, a dual UK-Pakistani citizen.
US prosecutors allege that the scheme was anchored on insider information obtained by an investment banker identified as “Kim,” who worked at an investment bank involved in multiple mergers and acquisitions of publicly traded healthcare and biopharmaceutical companies.
According to the DoJ, Kim had access to confidential, market-moving information about several pending deals, either through direct involvement or via colleagues.
The statement alleged that Kim unlawfully shared details of at least nine non-public transactions with Saad Shoukat, who traded on the information personally and through a network of associates.
Saad Shoukat allegedly passed the tips to others, including his brothers, Khan and Okonkwo, who also traded on the information and made substantial profits.
“Overall, Saad Shoukat and his co-conspirators received illicit profits from the insider trading scheme totalling at least $41 million,” the Department of Justice stated.
Beyond insider trading, prosecutors also accused some of the defendants of orchestrating what they described as the “Olema Manipulation Scheme.” Olema is a publicly traded biopharmaceutical company focused on developing a breast cancer treatment drug known as OP-1250.
According to the indictment, Saad Shoukat, Arham Shoukat and others began acquiring Olema shares in the spring of 2021 and encouraged additional investments from their associates.
After purchasing substantial holdings, they allegedly obtained confidential information indicating that OP-1250 was less effective than expected.
Rather than disclose this negative information, the defendants are accused of falsifying the data they had illegally accessed and publicly disseminating it in a manner designed to appear legitimate and as though it originated from Olema itself. Prosecutors said the release of the falsified data exaggerated the drug’s effectiveness, temporarily boosting Olema’s share price.
During this period, the defendants allegedly sold large volumes of Olema stock, enabling them to profit and avoid significant losses once the stock price later corrected.
The indictment further alleges that members of the group engaged in a similar manipulation of the stock price of Opiant Pharmaceuticals, another publicly traded company involved in the development of treatments for opioid overdoses.
The Department of Justice said the defendants face multiple charges, including conspiracy, insider trading and stock manipulation.
If convicted, they could face maximum prison sentences ranging from 20 to 25 years on each count, in addition to substantial financial penalties.
Okonkwo is not the first Nigerian to face fraud-related prosecution in the United States.
On December 4, US authorities ordered the deportation of another Nigerian, Oluwaseun Adekoya, upon the completion of a 20-year prison sentence for his role in a $2 million fraud scheme.
According to the DoJ, Adekoya was convicted after a three-week trial on charges including conspiracy to commit bank fraud, conspiracy to commit money laundering and nine counts of aggravated identity theft.
