Biotech CEO Jailed for Securities Fraud & Insider Trading

A former US biotech chief executive has been sentenced to prison after misleading investors about a purported breakthrough drug and selling his own shares at inflated prices. On 26 January 2026, Nader Pourhassan, the former Chief Executive Officer of CytoDyn, received a 30 month prison sentence for securities fraud, wire fraud and insider trading, marking another high profile enforcement action against corporate executives who abuse market trust.

Pourhassan, aged 62, was convicted of orchestrating a multi year scheme in which he repeatedly misrepresented the prospects of an investigational drug being developed to treat HIV and COVID-19. Between 2018 and 2021, he made false and misleading public statements about the likelihood of approval by the Food and Drug Administration (FDA), despite knowing that the drug faced significant regulatory hurdles. These claims artificially inflated CytoDyn’s share price and attracted new investors during a period of heightened public sensitivity around the pandemic.

While promoting these misleading claims, Pourhassan sold approximately 4.8 million shares of his personal holdings in CytoDyn, generating around $4.4 million in proceeds. Prosecutors argued, and the jury agreed, that this amounted to classic insider trading, with Pourhassan exploiting non public information and investor optimism for personal gain. In December 2024, he was convicted of four counts of securities fraud, two counts of wire fraud and three counts of insider trading.

At sentencing, the court ordered Pourhassan to pay more than $5.3 million in restitution and to forfeit over $4.4 million, reflecting the scale of investor harm caused by the scheme. US authorities were explicit in condemning the conduct, noting that it not only defrauded investors but also undermined confidence in public markets and the integrity of medical innovation during a public health crisis.

The investigation was led by the Federal Bureau of Investigation (FBI), the Food and Drug Administration Office of Criminal Investigations (FDA OCI) and the US Postal Inspection Service. The case was prosecuted by the Department of Justice Criminal Division Fraud Section and the US Attorney’s Office for the District of Maryland, underscoring the coordinated approach taken to complex securities fraud involving regulated industries.

For compliance, legal and governance professionals, the case reinforces the continued enforcement focus on executive accountability, particularly where misleading disclosures intersect with insider trading. It also highlights the heightened scrutiny applied to public statements about medical products, where misinformation can distort markets and exploit vulnerable investors. As regulators continue to prioritise market integrity, this sentence serves as a clear warning that corporate status offers no shield against criminal liability.

Read the press release here.