The SEC has filed proposed final judgments against former Elanco senior director Trijya Vakil and her friend Neeraj Visen over trading before Elanco's acquisition of Kindred Biosciences. Vakil allegedly learned of the transaction through a confidential due-diligence assignment, purchased Kindred shares and tipped Visen shortly before the announcement. Kindred's stock subsequently rose approximately 46%, producing alleged gains of $2,447.50 for Vakil and $109,437 for Visen.
U.S. Securities and Exchange Commission (SEC)
Official Release:
https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26629
NEWS:
The Securities and Exchange Commission filed consents and proposed final judgments against Trijya Vakil and Neeraj Visen in its insider trading case involving Elanco Animal Health's acquisition of Kindred Biosciences. Kindred was a Nasdaq-listed biopharmaceutical company developing therapeutics for pets, while Vakil worked as Elanco's Senior Director of Product Innovation. According to the SEC's complaint, Elanco submitted a nonbinding proposal in April 2021 to acquire Kindred for between $8 and $10.50 per share and created a cross-functional team to evaluate the target's products, technical risks and potential revenue. Vakil was assigned to that team and allegedly informed that the project concerned a planned acquisition and was highly confidential. Elanco used the code name "Project Knight," although the SEC says internal communications sometimes identified Kindred directly. Certain project communications also carried Elanco's most restrictive confidentiality designation. The complaint states that Vakil had completed insider trading training explaining that employees could not trade securities of another public company when they learned material nonpublic information about that company through their Elanco duties. Following an internal due-diligence meeting on May 12, 2021, Vakil allegedly purchased 500 Kindred shares despite having no previous history of trading the stock. Elanco and Kindred eventually agreed to a cash acquisition at $9.25 per share, and the transaction was announced before the market opened on June 16, 2021. Kindred shares rose approximately 46%, from a previous closing price of $6.34 to $9.23, and Vakil allegedly sold her position for a gain of $2,447.50.
The SEC also alleged that Vakil disclosed information about the planned acquisition to Visen, a long-time friend with whom she communicated through telephone calls, video conferences and instant messages. The complaint states that Vakil mentioned the proposed transaction multiple times during the weeks leading up to the announcement, told Visen that she expected Kindred's share price to rise, and disclosed that she had purchased Kindred shares herself. On June 15, 2021, one day before the public announcement, Vakil allegedly told Visen that the acquisition would be announced within a day or two. Visen, described by the SEC as an infrequent trader who had never previously traded Kindred securities, then purchased 38,000 Kindred shares. The following day's price increase allegedly produced a $109,437 gain. The complaint further described conduct following the trades that regulators viewed as evidence of concealment. When Elanco circulated a FINRA-generated list of individuals who had traded Kindred before the announcement, Visen's name appeared on the list, but Vakil allegedly told the company that she did not know anyone identified. The SEC also alleged that she initially gave inaccurate information during a later FBI interview and attempted to have Visen support a false explanation concerning how frequently the acquisition had been discussed. Both Vakil and Visen subsequently pleaded guilty to criminal charges in parallel proceedings brought by the U.S. Attorney's Office for the Southern District of New York. The SEC case therefore covers more than the initial purchases: it illustrates how regulators can compare due-diligence access, internal communications, personal relationships, brokerage activity and responses to later inquiries when reconstructing a suspected tipping chain.
Under the latest proposed final judgments, Vakil and Visen would each pay a civil penalty of $54,718, subject to court approval. These proposed monetary judgments follow consent judgments entered in August 2025 that permanently enjoined both defendants from violating Section 10(b) of the Exchange Act and Rule 10b-5 and prohibited them from serving as officers or directors of specified public companies. The case carries a broader compliance lesson for companies conducting acquisitions. Merger confidentiality controls must cover every employee involved in commercial, scientific, technical and product-level due diligence—not only directors, executives, investment bankers and lawyers. A project code name provides limited protection if internal messages repeatedly identify the target or if sensitive materials remain accessible after an employee's assignment ends. Effective controls may include transaction-specific restricted lists, documented need-to-know access, reminders issued before major board or diligence milestones, monitoring of unusual downloads and forwarding activity, and prompt investigation of names appearing in FINRA or regulatory trading inquiries. Employees must also understand that the prohibition extends to trading the target company's securities and to passing information to friends or relatives, even when the employee does not receive a direct share of the resulting profit. For investors, the case demonstrates why a large, first-time position opened immediately before a takeover announcement can attract scrutiny when it coincides with a personal connection to someone inside the buyer's due-diligence process.
KEY POINTS:
- Vakil allegedly received confidential information about Elanco's planned acquisition of Kindred through her role on a cross-functional due-diligence team.
- She allegedly purchased 500 Kindred shares and earned $2,447.50 after the acquisition announcement caused the stock to rise approximately 46%.
- The SEC says Vakil tipped Visen one day before the announcement, after which he purchased 38,000 shares and earned $109,437.
- Vakil and Visen each pleaded guilty in parallel criminal proceedings and were previously subjected to permanent injunctions and public-company officer-and-director bars.
- The latest proposed judgments would require each defendant to pay a $54,718 civil penalty, subject to court approval.