Insider Tipped Off! Dumped Stock Before $20K Loss!

SEC v. Brian J. Suthoff — U.S. Securities and Exchange Commission Litigation Release No. 26466, dated January 26, 2026.

The SEC filed a settled insider trading action against Brian Suthoff, a Massachusetts resident. Suthoff allegedly traded on material non-public information about Sage Therapeutics' drug approval denial, avoiding nearly $20,000 in losses. He consented to a judgment without admitting or denying the allegations.

In Plain English

Imagine you have a friend who works at a company making a new medicine. This friend learns a secret: the medicine won't get approved by the government. Before this secret is announced to everyone, you use the secret information to sell all your stock in that company, so you don't lose money when the price drops. That's what the SEC says Brian Suthoff did with Sage Therapeutics stock.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Insider Learns Secret Information In June 2023, an insider at Sage Therapeutics learned material non-public information regarding the FDA's position on the company's drug application for major depressive disorder (MDD). This information was learned on an "extremely restricted" basis.
2. Confidentiality Restrictions Imposed The Sage insider attended committee meetings about the FDA's comments and received emails imposing special confidentiality restrictions and a blackout period on trading Sage securities due to the FDA developments.
3. Information Misappropriated Brian Suthoff owed a duty of trust and confidence to the Sage insider. The SEC alleges that Suthoff misappropriated this material non-public information from the insider.
4. Suthoff Sells Shares In advance of Sage's August 4, 2023 announcement, Suthoff liquidated all the Sage shares he had held for more than two years. This sale was based on the MNPI he allegedly obtained.
5. Company Announces Bad News On August 4, 2023, Sage Therapeutics announced that the FDA had denied approval for its primary drug candidate for the treatment of MDD. This news was significant, as MDD represented approximately 93% of the target market for the drug.
6. Stock Price Plummets Following the announcement, Sage's stock price dropped approximately 53% from the previous day's closing price.
7. Losses Avoided By selling his shares before the announcement, Suthoff allegedly avoided losses of $19,680. The SEC's complaint details this amount as the ill-gotten gain from the alleged insider trading.

The Enforcement Action

On January 26, 2026, the SEC filed a settled insider trading action against Brian Suthoff in the U.S. District Court for the District of Massachusetts. Suthoff consented to a judgment permanently enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The judgment orders him to pay disgorgement of $19,680.00, prejudgment interest of $3,345.67, and a civil penalty of $19,680.00. He is also barred from serving as an officer or director of any public company for five years. The SEC's investigation was conducted by Cassandra Arriaza and Jeffrey Cook, supervised by Celia Moore. FINRA assisted.

Named in this action: Brian J. Suthoff.

Original SEC litigation release ↗ · Browse all cases