A former board member with a New Jersey pharmaceutical company is accused of masterminding a $38 million insider trading scheme. Department of Justice prosecutors claim Dale Chappell, while working with Humanigen, Inc., committed four counts of securities fraud and benefitted from insider information in the summer of 2021. “Chappell avoided more than $38 million in losses by selling millions of shares of Humanigen stock while in possession of material, nonpublic information about Humanigen’s application to the Food and Drug Administration (FDA) for approval a drug to treat COVID-19 called Lenzilumab,” the DOJ alleges. The 54-year-old suspect was reportedly arrested in Switzerland on Friday and is expected to be extradited to New Jersey to face charges. Humanigen announced plans to seek emergency-use authorization for the COVID-19 medication in March. According to prosecutors, the company was informed in the following months the FDA was unlikely to grant that request. Chappell is accused of using that information, which hadn’t yet been made public, to dump stocks before their value dropped by roughly 50%. The securities fraud cases carry a penalty of up to 25 years in prison, and the insider trading charge carries a maximum 20-year sentence. In addition to sitting on Humanigen board of directors, Chappell was the company’s chief scientific officer.