BIOTECH CEO SENTENCED TO FEDERAL PRISON FOR SECURITIES FRAUD AND INSIDER TRADING LINKED TO COVID-19 AND HIV DRUG CLAIMS

GREENBELT, Md. — A former biotechnology executive has been sentenced to federal prison after a jury found he orchestrated a multi-year securities fraud scheme that misled investors about drug development claims tied to HIV and COVID-19 during a period of heightened public and market sensitivity.

On January 26, 2026, Nader Pourhassan, 62, of Lake Oswego, Oregon, was sentenced to 30 months in federal prison for securities fraud, wire fraud, and insider trading. The sentence was imposed by a U.S. District Judge following convictions stemming from false public statements that artificially inflated company stock prices, allowing Pourhassan to sell millions of dollars in personal shares at a profit.

Court records show that Pourhassan served as Chief Executive Officer of CytoDyn, a publicly traded biotechnology company headquartered in Vancouver, Washington. The company promoted an investigational drug purported to have potential applications for HIV treatment and COVID-19 response. Between 2018 and 2021, prosecutors established that Pourhassan repeatedly made misleading and unsupported claims to investors about the drug’s development status and prospects for regulatory approval.

Evidence presented at trial demonstrated that these public statements were not grounded in verified clinical results or regulatory progress. Instead, they were used to drive investor interest and inflate CytoDyn’s share price. After issuing those statements, Pourhassan sold approximately 4.8 million shares of company stock, generating $4.4 million in personal proceeds.

Jurors found that the conduct was deliberate and sustained, not the result of miscommunication or optimism about drug development timelines. The scheme unfolded during a period when public attention was sharply focused on biomedical breakthroughs, increasing both investor vulnerability and market volatility.

In December 2024, a federal jury convicted Pourhassan on four counts of securities fraud, two counts of wire fraud, and three counts of insider trading. In addition to the prison sentence, the court ordered him to pay more than $5.3 million in restitution and to forfeit more than $4.4 million linked to the illegal stock sales.

Federal authorities described the case as a clear example of corporate leadership abusing market trust by exploiting public health narratives for personal financial gain. Investigators emphasized that biotechnology firms carry heightened responsibility when making public claims, given the reliance of investors and patients on accurate representations of scientific progress.

The investigation involved coordination between federal financial crime and regulatory enforcement units, reflecting the overlapping risks to both market integrity and public confidence when medical claims are used as financial leverage. Prosecutors underscored that executive accountability remains central to maintaining trust in public markets, particularly in sectors where misinformation can have broad consequences.

The sentencing concludes the criminal phase of the case, formally establishing liability for conduct that federal authorities described as calculated deception rather than failed innovation.

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