SEC v. Ruimin Xie, No. 2:24-cv-09801, District of New Jersey (Oct. 17, 2024) — Complaint

David J. D’Addio
Ivan Panchenko
SECURITIES AND EXCHANGE COMMISSION
Boston Regional Office
33 Arch St., 24th Floor
Boston, MA 02110
(617) 573-8900

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SECURITIES AND EXCHANGE COMMISSION,

    Plaintiff,

            v.

RUIMIN XIE,

                                                Defendant.

COMPLAINT

Civil Action No. 24-cv-________

JURY TRIAL DEMANDED

COMPLAINT
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against the defendant:
SUMMARY
1. This case involves insider trading by New Jersey resident Ruimin Xie in the
securities of his former employer, Canada-based BELLUS Health Inc. (“Bellus Health”), in
advance of the April 18, 2023 public announcement that United Kingdom-based pharmaceutical
company GSK plc. (“GSK”) would acquire BELLUS Health (the “Announcement”).
2. On April 9, 2023, Xie, who was BELLUS Health’s Director of Analytical
Development, learned that GSK was conducting due diligence of BELLUS Health.  Due
diligence generally refers to the process of assessing a company before entering a business

2
 
arrangement with it.  Between April 9 and April 11, 2023, Xie drafted responses to certain of
GSK’s due diligence questions regarding the quality and safety of BELLUS Health’s only drug
product, which was in late-stage development.
3. The day after Xie finished drafting responses to GSK’s due diligence questions,
he began purchasing BELLUS Health common stock and call options, a type of security that is
typically purchased if the buyer believes the company’s stock price will increase.
1
  Xie attempted
to purchase BELLUS Health securities for four consecutive trading days, from April 12 to April
17, 2023, in brokerage accounts in his own name and in the name of his spouse.  Before April
12, 2023, Xie had never purchased BELLUS Health securities.
4. Over those four consecutive trading days, Xie purchased 7,051 BELLUS Health
shares at prices ranging from $6.95 to $7.06 per share, and 10 call options allowing him to
purchase another 1,000 BELLUS Health shares for $7.50 per share by April 21, 2023.  He
attempted to purchase additional BELLUS Health securities during this period, but his orders
were not filled.
5. On April 18, 2023, the day after Xie last purchased BELLUS securities, GSK
announced that it would acquire BELLUS Health for $14.75 per share.  The price of BELLUS
Health shares increased 99 percent from a closing price of $7.26 per share on April 17 to $14.44
per share on April 18.
6. On April 18, 2023, following the Announcement, Xie sold all of his BELLUS
Health call options.  Days later, on April 24, 2024, Xie sold all his BELLUS Health shares.
These trades generated more than $59,000 in unlawful profits.
 
1
 A buyer who purchases a call option for a stock has the opportunity, but not the obligation, to buy that stock for a
specific price for a predetermined period.

3
 
JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), 27,
and 21A(a) of the Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. §§ 78u(d), 78u(e),
78aa, and 78u-1(a)].
8. Defendant, directly and indirectly, made use of the means or instrumentalities of
interstate commerce or of the mails or of the facilities of a national securities exchange in
connection with the transactions, acts, practices, and courses of business alleged herein.
9. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa].
Certain of the acts, practices, transactions, and courses of business alleged in this Complaint
occurred within this District.  Among other things, Xie, who resides in this District, placed
orders to purchase and sell BELLUS Health securities from this District.
DEFENDANT
10. Ruimin Xie, age 48, resides in New Jersey.  During the insider trading alleged
herein, Xie was the Director of Analytical Development at BELLUS Health.
RELATED ENTITIES
11. BELLUS Health Inc., was a pharmaceutical company incorporated in Canada,
with a principal place of business in Laval, Quebec, Canada.  BELLUS Health’s securities were
listed on the Nasdaq until June 2023, when its securities were delisted following the completion
of GSK’s acquisition of BELLUS Health.
12. GSK, plc. is a pharmaceutical company incorporated in the United Kingdom,
with a principal place of business in Brentford, England, United Kingdom.  GSK has been an
SEC-reporting company since 2001, and its American Depositary Shares are listed on the New
York Stock Exchange.

4
 
FACTS

I. Xie Owed a Duty to BELLUS Health Not To Use Confidential Company
Information for His Own Purposes, Including for His Securities Trading.

13. Xie joined BELLUS Health in August 2022 as Director of Analytical
Development, a position he held until March 2024.  Before joining BELLUS Health, Xie had
worked for approximately 15 years in the pharmaceutical industry, first as a laboratory scientist
and later in the field of analytical development, which relates to the design and implementation
of methods that evaluate (among other matters) the purity, potency, and stability of drug
substances and products.  As BELLUS Health’s Director of Analytical Development, Xie was
responsible for leading the analytical development of BELLUS Health’s only drug, camlipixant,
which was designed to treat refractory chronic cough.  In this role, Xie also contributed to
BELLUS Health’s overall development strategy for camlipixant.
14. Around the time Xie joined BELLUS Health, he executed several agreements that
obliged him at all relevant times to maintain in confidence certain information that he learned
during his employment—including information relating to potential mergers, acquisitions, and
business arrangements—and to refrain from trading in BELLUS Health securities if he possessed
material nonpublic information.
15. On July 14, 2022, Xie executed an employment offer letter indicating that, as a
BELLUS Health employee, he would “be required to comply with [a] Confidentiality
Agreement,” “the Company’s Disclosure and Trading Policy,” and other BELLUS Health
policies.
16. On August 1, 2022, Xie executed a confidentiality agreement with BELLUS
Health that provided, in relevant part:  “The Employee acknowledges, understands and agrees
that the Employee will not, at any time during the Employee’s employment . . . use or disclose

5
 
. . . any Confidential Information, except in the best interests of the Company in the course of
performing the Employee’s duties under this Agreement.”
17. The confidentiality agreement defined “Confidential Information” as “any and all
information that concerns or forms part of the activities of the Company,” including “its
commercial, scientific, or technical activities, . . . [and] its objectives, projects, [and] plans.”  Xie
understood that the confidentiality agreement prohibited using confidential information for the
purpose of trading in BELLUS Health securities, among other things.
18. On August 1, 2022, Xie executed an employment agreement, which, consistent
with his offer letter, obliged him to comply with BELLUS Health’s Disclosure and Trading
Policy (the “Trading Policy”).  Xie received a copy of the Trading Policy at the outset of his
tenure with BELLUS Health and certified that he read and understood it.
19. The Trading Policy prohibited BELLUS Health employees from “trading . . .
[BELLUS Health] securities while in possession of material information before such information
ha[d] been fully disclosed to the public.”  The Trading Policy also required BELLUS Health
employees with access to material information concerning BELLUS Health to “consult with the
CFO or the CEO . . . before purchasing or selling [BELLUS Health] shares or other securities.”
The Trading Policy defined “material information” to include “any information that a reasonable
investor would consider important in deciding whether to purchase or hold an issuer’s
securities.”  Companies whose stock is publicly traded are often referred to as “issuers” of
securities.  The Trading Policy provided several examples of information “reasonably likely to
be found material in particular situations,” including “proposals, plans or agreements, even if
preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic
alliances, licensing arrangements, or purchases or sales of substantial assets.”

6
 
II. April 9 - 11, 2023:  Xie Participated in Responding to GSK’s Due Diligence
Questions Regarding BELLUS Health’s Drug Product.

20. At all relevant times, camlipixant was BELLUS Health’s sole drug in
development.  On March 31, 2023, following an initial period of due diligence regarding
BELLUS Health and camlipixant, GSK offered to acquire BELLUS Health for $12.50 per share
in cash.
21. On April 7, 2023, GSK increased its offer to $14.75 per share in cash.  That day,
BELLUS Health and GSK entered an exclusivity agreement and began to negotiate the terms of
GSK’s acquisition of BELLUS Health.  Meanwhile, GSK continued to conduct due diligence
concerning camlipixant.
22. At all relevant times, the fact that GSK was conducting due diligence of BELLUS
Health and camlipixant was nonpublic information.
23. On April 9, 2023, Xie’s supervisor sent Xie and several of Xie’s colleagues a
document containing due diligence questions “from GSK” and asked for their help in responding
to the questions.  Between April 9 and April 11, 2023, Xie helped draft responses to certain of
GSK’s questions, which concerned matters related to the quality and safety of camlipixant.
24. Xie completed his portion of the GSK due diligence exercise late on April 11,
2023.
25. Xie knew, consciously avoided knowing, or was reckless in not knowing that
GSK was conducting due diligence concerning BELLUS Health and camlipixant in connection
with a material business transaction with BELLUS Health.

7
 
III. April 12 - 17, 2023:  Xie Purchased and Attempted to Purchase BELLUS Health
Securities.

26. On April 12, 2023—the day after Xie finished responding to the GSK due
diligence questions assigned to him, and having never purchased BELLUS Health securities
before—Xie began to place orders for BELLUS Health common stock in his brokerage account
and short-term, out-of-the-money BELLUS Health call options in a brokerage account held by
his spouse.
27. An out-of-the-money call option is an option that grants the purchaser the
opportunity to purchase a stock at a price (the “strike price”) greater than the price at which the
stock is currently selling on the market.  Put another way, an out-of-the-money call option is a
bet that the price of a security will increase.
28. In this case, the call options for which Xie placed orders granted him the right to
purchase shares of BELLUS Health for $7.50 per share on or before April 21, 2023.  On the
dates Xie placed his options orders, the closing price of BELLUS Health shares ranged from
$6.95 to $7.19 per share.  Thus, Xie was betting that the price of BELLUS Health shares would
rise above $7.50 per share on or before that date.  Otherwise, the call options would expire
valueless.
29. From April 12 through April 17, 2023, Xie placed at least one order each trading
day for BELLUS Health stock and short-term, out-of-the-money BELLUS Health call options on
the basis of information that he knew, consciously avoided knowing, or was reckless in not
knowing was both material and nonpublic.  Because Xie placed limit orders, and the market
price for the securities exceeded the limit price of certain of Xie’s orders, only some of the orders
were filled.  The orders that were executed during this period are summarized below.

9
 
Health common stock held in his own account.  In all, Xie made more than $59,000 from his
unlawful BELLUS Health trades.
CLAIM FOR RELIEF
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5)

36. Paragraphs 1 through 35 above are re-alleged and incorporated by reference as if
fully set forth herein.
37. Xie, directly or indirectly, in connection with the purchase or sale of securities, by
the use of the means or instrumentalities of interstate commerce or of the mails, or of any facility
of any national securities exchange, intentionally, knowingly or recklessly, (i) employed devices,
schemes, or artifices to defraud; (ii) made untrue statements of material facts or omitted to state
material facts necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; and (iii) engaged in acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon any persons, including
purchasers or sellers of the securities.
38. By reason of the conduct described above, Xie violated Exchange Act Section
10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
A. Enter a permanent injunction restraining Xie, his agents, servants, employees and
attorneys, and those persons in active concert or participation with him who receive actual notice
of the injunction by personal service or otherwise, from violating Section 10(b) of the Exchange
Act [15 U.S.C. §§78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5] by:  (i) buying or
selling a security of any issuer, on the basis of material nonpublic information, in breach of a
fiduciary duty or other duty of trust or confidence that is owed directly, indirectly, or

10
 
derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person
who is the source of the information; or (ii) communicating material nonpublic information
about a security or issuer, in breach of a fiduciary duty or other duty of trust or confidence, to
another person or persons for purposes of buying or selling any security
B. Order Xie to disgorge, with prejudgment interest, all ill-gotten gains obtained by
reason of the unlawful conduct alleged in this Complaint pursuant to Exchange Act Sections
21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)];
C. Order Xie to pay civil monetary penalties pursuant to Section 21A of the
Exchange Act [15 U.S.C. § 78u-1];
D. Bar Xie from acting as an officer or director for a period of five years pursuant to
Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)];
E. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
F. Grant such other and further relief as this Court may deem just and proper.
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.

DATED:  October 15, 2024.
                                                                        Respectfully            submitted,
/s/ David J. D’Addio
David J. D’Addio
Ivan Panchenko
Boston Regional Office
33 Arch St., 24
th
 Floor
Boston, MA 02110
Tel:  (617) 573-8900
Email:  [email protected]

11
 
LOCAL RULE 11.2 CERTIFICATION

 Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the
Defendant in the foregoing Complaint is not the subject of any other civil action pending in any
court, or of any pending arbitration or administrative proceeding.

    /s/ David J. D’Addio
                                                David            D’Addio
                                                            Ivan            Panchenko
                                                Attorneys            for            Plaintiff
    U.S. SECURITIES AND EXCHANGE COMMISSION
                                                Boston            Regional            Office
                                                33            Arch            Street,            24
th
 Floor
                                                Boston,            MA            02110
    Tel:  (617) 573-8900
                                                            Email:                        [email protected]

12
 
DESIGNATION OF AGENT FOR SERVICE

Pursuant to Local Civil Rule 101.1(f), because the Securities and Exchange Commission
does not have an office in this District, the undersigned hereby designates the United States
Attorney’s Office for the District of New Jersey for receipt of service of all notices or papers in
this action at the following address:

United States Attorney’s Office
District of New Jersey
Attention:  Angela E. Juneau
Assistant U.S. Attorney
 970 Broad Street, Suite 700
 Newark, NJ 17102

    /s/ David J. D’Addio
                                                David            D’Addio
                                                            Ivan            Panchenko
                                                Attorneys            for            Plaintiff
    U.S. SECURITIES AND EXCHANGE COMMISSION
                                                Boston            Regional            Office
                                                33            Arch            Street,            24
th
 Floor
                                                Boston,            MA            02110
    Tel:  (617) 573-8900
                                                            Email:                        [email protected]

David J. D’Addio 
Ivan Panchenko 
SECURITIES AND EXCHANGE COMMISSION 
Boston Regional Office 
33 Arch St., 24th Floor 
Boston, MA 02110 
(617) 573-8900 
 

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 

 

 
SECURITIES AND EXCHANGE COMMISSION, 
 
    Plaintiff, 
 
 v. 
 
RUIMIN XIE, 
 
    Defendant. 
 

 
 

COMPLAINT 
 

 
Civil Action No. 24-cv-________ 

 
JURY TRIAL DEMANDED 

 
 

 
COMPLAINT 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against the defendant: 

SUMMARY  

1. This case involves insider trading by New Jersey resident Ruimin Xie in the 

securities of his former employer, Canada-based BELLUS Health Inc. (“Bellus Health”), in 

advance of the April 18, 2023 public announcement that United Kingdom-based pharmaceutical 

company GSK plc. (“GSK”) would acquire BELLUS Health (the “Announcement”).   

2. On April 9, 2023, Xie, who was BELLUS Health’s Director of Analytical 

Development, learned that GSK was conducting due diligence of BELLUS Health.  Due 

diligence generally refers to the process of assessing a company before entering a business 

Case 2:24-cv-09801     Document 1     Filed 10/15/24     Page 1 of 12 PageID: 1



2 
 

arrangement with it.  Between April 9 and April 11, 2023, Xie drafted responses to certain of 

GSK’s due diligence questions regarding the quality and safety of BELLUS Health’s only drug 

product, which was in late-stage development.   

3. The day after Xie finished drafting responses to GSK’s due diligence questions, 

he began purchasing BELLUS Health common stock and call options, a type of security that is 

typically purchased if the buyer believes the company’s stock price will increase.1  Xie attempted 

to purchase BELLUS Health securities for four consecutive trading days, from April 12 to April 

17, 2023, in brokerage accounts in his own name and in the name of his spouse.  Before April 

12, 2023, Xie had never purchased BELLUS Health securities. 

4. Over those four consecutive trading days, Xie purchased 7,051 BELLUS Health 

shares at prices ranging from $6.95 to $7.06 per share, and 10 call options allowing him to 

purchase another 1,000 BELLUS Health shares for $7.50 per share by April 21, 2023.  He 

attempted to purchase additional BELLUS Health securities during this period, but his orders 

were not filled.   

5. On April 18, 2023, the day after Xie last purchased BELLUS securities, GSK 

announced that it would acquire BELLUS Health for $14.75 per share.  The price of BELLUS 

Health shares increased 99 percent from a closing price of $7.26 per share on April 17 to $14.44 

per share on April 18.   

6. On April 18, 2023, following the Announcement, Xie sold all of his BELLUS 

Health call options.  Days later, on April 24, 2024, Xie sold all his BELLUS Health shares.  

These trades generated more than $59,000 in unlawful profits.   

 
1 A buyer who purchases a call option for a stock has the opportunity, but not the obligation, to buy that stock for a 
specific price for a predetermined period. 

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3 
 

JURISDICTION AND VENUE 

7. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), 27, 

and 21A(a) of the Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. §§ 78u(d), 78u(e), 

78aa, and 78u-1(a)]. 

8. Defendant, directly and indirectly, made use of the means or instrumentalities of 

interstate commerce or of the mails or of the facilities of a national securities exchange in 

connection with the transactions, acts, practices, and courses of business alleged herein. 

9. Venue lies in this District under Exchange Act Section 27 [15 U.S.C. § 78aa]. 

Certain of the acts, practices, transactions, and courses of business alleged in this Complaint 

occurred within this District.  Among other things, Xie, who resides in this District, placed 

orders to purchase and sell BELLUS Health securities from this District.   

DEFENDANT 

10. Ruimin Xie, age 48, resides in New Jersey.  During the insider trading alleged 

herein, Xie was the Director of Analytical Development at BELLUS Health.   

RELATED ENTITIES 

11. BELLUS Health Inc., was a pharmaceutical company incorporated in Canada, 

with a principal place of business in Laval, Quebec, Canada.  BELLUS Health’s securities were 

listed on the Nasdaq until June 2023, when its securities were delisted following the completion 

of GSK’s acquisition of BELLUS Health. 

12. GSK, plc. is a pharmaceutical company incorporated in the United Kingdom, 

with a principal place of business in Brentford, England, United Kingdom.  GSK has been an 

SEC-reporting company since 2001, and its American Depositary Shares are listed on the New 

York Stock Exchange.  

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4 
 

FACTS 
 

I. Xie Owed a Duty to BELLUS Health Not To Use Confidential Company 
Information for His Own Purposes, Including for His Securities Trading. 
 
13. Xie joined BELLUS Health in August 2022 as Director of Analytical 

Development, a position he held until March 2024.  Before joining BELLUS Health, Xie had 

worked for approximately 15 years in the pharmaceutical industry, first as a laboratory scientist 

and later in the field of analytical development, which relates to the design and implementation 

of methods that evaluate (among other matters) the purity, potency, and stability of drug 

substances and products.  As BELLUS Health’s Director of Analytical Development, Xie was 

responsible for leading the analytical development of BELLUS Health’s only drug, camlipixant, 

which was designed to treat refractory chronic cough.  In this role, Xie also contributed to 

BELLUS Health’s overall development strategy for camlipixant. 

14. Around the time Xie joined BELLUS Health, he executed several agreements that 

obliged him at all relevant times to maintain in confidence certain information that he learned 

during his employment—including information relating to potential mergers, acquisitions, and 

business arrangements—and to refrain from trading in BELLUS Health securities if he possessed 

material nonpublic information.  

15. On July 14, 2022, Xie executed an employment offer letter indicating that, as a 

BELLUS Health employee, he would “be required to comply with [a] Confidentiality 

Agreement,” “the Company’s Disclosure and Trading Policy,” and other BELLUS Health 

policies. 

16. On August 1, 2022, Xie executed a confidentiality agreement with BELLUS 

Health that provided, in relevant part:  “The Employee acknowledges, understands and agrees 

that the Employee will not, at any time during the Employee’s employment . . . use or disclose 

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5 
 

. . . any Confidential Information, except in the best interests of the Company in the course of 

performing the Employee’s duties under this Agreement.”     

17. The confidentiality agreement defined “Confidential Information” as “any and all 

information that concerns or forms part of the activities of the Company,” including “its 

commercial, scientific, or technical activities, . . . [and] its objectives, projects, [and] plans.”  Xie 

understood that the confidentiality agreement prohibited using confidential information for the 

purpose of trading in BELLUS Health securities, among other things.  

18. On August 1, 2022, Xie executed an employment agreement, which, consistent 

with his offer letter, obliged him to comply with BELLUS Health’s Disclosure and Trading 

Policy (the “Trading Policy”).  Xie received a copy of the Trading Policy at the outset of his 

tenure with BELLUS Health and certified that he read and understood it. 

19. The Trading Policy prohibited BELLUS Health employees from “trading . . . 

[BELLUS Health] securities while in possession of material information before such information 

ha[d] been fully disclosed to the public.”  The Trading Policy also required BELLUS Health 

employees with access to material information concerning BELLUS Health to “consult with the 

CFO or the CEO . . . before purchasing or selling [BELLUS Health] shares or other securities.”  

The Trading Policy defined “material information” to include “any information that a reasonable 

investor would consider important in deciding whether to purchase or hold an issuer’s 

securities.”  Companies whose stock is publicly traded are often referred to as “issuers” of 

securities.  The Trading Policy provided several examples of information “reasonably likely to 

be found material in particular situations,” including “proposals, plans or agreements, even if 

preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic 

alliances, licensing arrangements, or purchases or sales of substantial assets.”   

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6 
 

II. April 9 - 11, 2023:  Xie Participated in Responding to GSK’s Due Diligence 
Questions Regarding BELLUS Health’s Drug Product. 
 
20. At all relevant times, camlipixant was BELLUS Health’s sole drug in 

development.  On March 31, 2023, following an initial period of due diligence regarding 

BELLUS Health and camlipixant, GSK offered to acquire BELLUS Health for $12.50 per share 

in cash.   

21. On April 7, 2023, GSK increased its offer to $14.75 per share in cash.  That day, 

BELLUS Health and GSK entered an exclusivity agreement and began to negotiate the terms of 

GSK’s acquisition of BELLUS Health.  Meanwhile, GSK continued to conduct due diligence 

concerning camlipixant. 

22. At all relevant times, the fact that GSK was conducting due diligence of BELLUS 

Health and camlipixant was nonpublic information.  

23. On April 9, 2023, Xie’s supervisor sent Xie and several of Xie’s colleagues a 

document containing due diligence questions “from GSK” and asked for their help in responding 

to the questions.  Between April 9 and April 11, 2023, Xie helped draft responses to certain of 

GSK’s questions, which concerned matters related to the quality and safety of camlipixant.  

24. Xie completed his portion of the GSK due diligence exercise late on April 11, 

2023. 

25. Xie knew, consciously avoided knowing, or was reckless in not knowing that 

GSK was conducting due diligence concerning BELLUS Health and camlipixant in connection 

with a material business transaction with BELLUS Health.  

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III. April 12 - 17, 2023:  Xie Purchased and Attempted to Purchase BELLUS Health 
Securities.  
 
26. On April 12, 2023—the day after Xie finished responding to the GSK due 

diligence questions assigned to him, and having never purchased BELLUS Health securities 

before—Xie began to place orders for BELLUS Health common stock in his brokerage account 

and short-term, out-of-the-money BELLUS Health call options in a brokerage account held by 

his spouse.   

27. An out-of-the-money call option is an option that grants the purchaser the 

opportunity to purchase a stock at a price (the “strike price”) greater than the price at which the 

stock is currently selling on the market.  Put another way, an out-of-the-money call option is a 

bet that the price of a security will increase.   

28. In this case, the call options for which Xie placed orders granted him the right to 

purchase shares of BELLUS Health for $7.50 per share on or before April 21, 2023.  On the 

dates Xie placed his options orders, the closing price of BELLUS Health shares ranged from 

$6.95 to $7.19 per share.  Thus, Xie was betting that the price of BELLUS Health shares would 

rise above $7.50 per share on or before that date.  Otherwise, the call options would expire 

valueless.      

29. From April 12 through April 17, 2023, Xie placed at least one order each trading 

day for BELLUS Health stock and short-term, out-of-the-money BELLUS Health call options on 

the basis of information that he knew, consciously avoided knowing, or was reckless in not 

knowing was both material and nonpublic.  Because Xie placed limit orders, and the market 

price for the securities exceeded the limit price of certain of Xie’s orders, only some of the orders 

were filled.  The orders that were executed during this period are summarized below.   

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Health common stock held in his own account.  In all, Xie made more than $59,000 from his 

unlawful BELLUS Health trades.   

CLAIM FOR RELIEF 
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5)  

 
36. Paragraphs 1 through 35 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

37. Xie, directly or indirectly, in connection with the purchase or sale of securities, by 

the use of the means or instrumentalities of interstate commerce or of the mails, or of any facility 

of any national securities exchange, intentionally, knowingly or recklessly, (i) employed devices, 

schemes, or artifices to defraud; (ii) made untrue statements of material facts or omitted to state 

material facts necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; and (iii) engaged in acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon any persons, including 

purchasers or sellers of the securities. 

38. By reason of the conduct described above, Xie violated Exchange Act Section 

10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5].  

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Enter a permanent injunction restraining Xie, his agents, servants, employees and 

attorneys, and those persons in active concert or participation with him who receive actual notice 

of the injunction by personal service or otherwise, from violating Section 10(b) of the Exchange 

Act [15 U.S.C. §§78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5] by:  (i) buying or 

selling a security of any issuer, on the basis of material nonpublic information, in breach of a 

fiduciary duty or other duty of trust or confidence that is owed directly, indirectly, or 

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derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person 

who is the source of the information; or (ii) communicating material nonpublic information 

about a security or issuer, in breach of a fiduciary duty or other duty of trust or confidence, to 

another person or persons for purposes of buying or selling any security 

B. Order Xie to disgorge, with prejudgment interest, all ill-gotten gains obtained by 

reason of the unlawful conduct alleged in this Complaint pursuant to Exchange Act Sections 

21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; 

C. Order Xie to pay civil monetary penalties pursuant to Section 21A of the 

Exchange Act [15 U.S.C. § 78u-1];  

D. Bar Xie from acting as an officer or director for a period of five years pursuant to 

Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)];  

E. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

F. Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable. 

 
DATED:  October 15, 2024. 

      Respectfully submitted, 

/s/ David J. D’Addio 
David J. D’Addio 
Ivan Panchenko 
Boston Regional Office 
33 Arch St., 24th Floor 
Boston, MA 02110 
Tel:  (617) 573-8900   
Email:  [email protected]   

  

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LOCAL RULE 11.2 CERTIFICATION 
 
 Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the 
Defendant in the foregoing Complaint is not the subject of any other civil action pending in any 
court, or of any pending arbitration or administrative proceeding.  
 

    /s/ David J. D’Addio 
    David D’Addio 

     Ivan Panchenko 
    Attorneys for Plaintiff  
    U.S. SECURITIES AND EXCHANGE COMMISSION  
    Boston Regional Office 
    33 Arch Street, 24th Floor 
    Boston, MA 02110 
    Tel:  (617) 573-8900   

     Email:  [email protected]   
  

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DESIGNATION OF AGENT FOR SERVICE 
 
Pursuant to Local Civil Rule 101.1(f), because the Securities and Exchange Commission 

does not have an office in this District, the undersigned hereby designates the United States 
Attorney’s Office for the District of New Jersey for receipt of service of all notices or papers in 
this action at the following address:  

 
United States Attorney’s Office  
District of New Jersey  
Attention:  Angela E. Juneau 
Assistant U.S. Attorney  

 970 Broad Street, Suite 700 
 Newark, NJ 17102 
 

    /s/ David J. D’Addio 
    David D’Addio 

     Ivan Panchenko 
    Attorneys for Plaintiff  
    U.S. SECURITIES AND EXCHANGE COMMISSION  
    Boston Regional Office 
    33 Arch Street, 24th Floor 
    Boston, MA 02110 
    Tel:  (617) 573-8900   

     Email:  [email protected]   
 

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