Former biotech CEO Nader Pourhassan has been sentenced to 30 months in prison for orchestrating a multimillion-dollar securities fraud scheme that exploited hopes for treatments of both HIV and COVID-19. The 62-year-old Lake Oswego, Oregon resident will also pay over $5.3 million in restitution and forfeit $4.4 million in ill-gotten gains.
Pourhassan, who led Vancouver, Washington-based CytoDyn, was convicted in December 2024 on multiple counts of securities fraud, wire fraud, and insider trading. Prosecutors demonstrated that he deliberately misled investors about the company’s development of leronlimab, a drug he falsely claimed was on track for FDA approval.
“The defendant lied to investors about a drug to treat HIV and COVID-19 so he could engage in insider trading,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. After making false announcements about the drug’s prospects, Pourhassan sold 4.8 million company shares, pocketing $4.4 million for himself.
Exploiting a Pandemic for Profit
During the height of the COVID-19 pandemic, Pourhassan’s scheme took on a particularly callous dimension. U.S. Attorney Kelly O. Hayes for the District of Maryland stated that “Pourhassan exploited a deadly public health crisis to intentionally deceive investors and the public out of millions – all so that he could enrich himself.”
Between 2018 and 2021, CytoDyn raised approximately $300 million from hopeful investors, many drawn in by Pourhassan’s false claims about leronlimab’s development progress. The company’s stock price would typically surge after these misleading announcements, creating perfect selling opportunities for the CEO.
What made the scheme particularly effective? Pourhassan timed his stock sales to follow the company’s misleading statements about FDA approval prospects, maximizing his personal gain while ordinary investors remained in the dark about the drug’s actual status.
“Nader Pourhassan lied and schemed to selfishly line his own pockets. He betrayed the trust placed in him as a corporate executive by deceiving and misleading investors,” noted Special Agent in Charge Jimmy Paul of the FBI Baltimore Field Office.
A Web of Deception
Court documents revealed that Pourhassan didn’t act alone. He and co-defendant Kazem Kazempour, CEO of a contract research organization hired by CytoDyn, knowingly misrepresented leronlimab’s clinical trials and FDA submissions. The pair were aware that studies had failed and that data presented to investors was misleading, yet continued to paint a rosy picture that inflated the company’s stock value.
Kazempour was initially found guilty of one count of securities fraud and one count of wire fraud. His company received over $22 million from CytoDyn, and he personally gained more than $340,000 from stock sales during the scheme.
The legal saga isn’t over for everyone involved, however. In an unexpected twist, a judge granted Kazempour a new trial, ruling that there had been prejudicial spillover from Pourhassan’s insider trading charges during their joint trial in 2024.
Special Agent in Charge Robert Iwanicki of the FDA’s Office of Criminal Investigations Los Angeles Field Office emphasized that “Today’s announcement should serve as a reminder that fraud related to medical products will not be tolerated.”
For investors who placed their faith—and funds—in CytoDyn’s promises, the sentencing brings some measure of justice, though many have lost substantial investments that will never be fully recovered. The case stands as a stark warning about the dangers of misleading statements in the high-stakes world of biotech development, especially during public health emergencies when hope can easily cloud judgment.
