Insider TRADES on DEADLY DRUG NEWS, Dodges $11K Loss!

SEC v. Cheryl R. Kramer — U.S. Securities and Exchange Commission Litigation Release No. 26652, dated September 29, 2026.

The SEC charged Cheryl Kramer with insider trading for illegally using non-public information about a drug approval denial from Sage Therapeutics, Inc. She allegedly sold her shares before the public announcement, avoiding losses of approximately $11,140. Kramer settled the charges without admitting guilt, agreeing to pay disgorgement, prejudgment interest, and a civil penalty.

In Plain English

Imagine you have a friend who works at a company and learns some very bad news before anyone else. This friend tells you, and you quickly sell all your stock in that company before the bad news becomes public. This is illegal because you used secret information to avoid losing money. The SEC caught this person and made them pay back the money they saved, plus extra fees.

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 Bad News In June 2023, an insider at Sage Therapeutics, Inc. learned that the U.S. Food and Drug Administration (FDA) had decided to remove a key indication (treatment for major depressive disorder) from the proposed label for Sage's drug. This information was material and non-public.
2. Information Shared The Sage insider shared this confidential information with Cheryl Kramer. Kramer understood the sensitive nature of this information, which was related to the FDA's position on the drug's approval.
3. Kramer Trades Ahead of News In the days leading up to Sage's official announcement, Kramer sold all of her Sage shares. She had held some of these shares for over a year, indicating a deliberate decision to liquidate her position.
4. Public Announcement On August 4, 2023, Sage Therapeutics announced that the FDA had denied approval for its primary drug candidate for major depressive disorder. This news was expected to negatively impact the company's stock price.
5. Loss Avoided Following the announcement, Sage's share price dropped by 53%. By selling her shares before this announcement, Kramer allegedly avoided losses of approximately $11,140.

The Enforcement Action

On September 24, 2026, the SEC filed a settled insider trading action against Cheryl R. Kramer. Kramer allegedly used material non-public information obtained from a Sage Therapeutics, Inc. insider regarding the FDA's position on the company's drug approval. Kramer sold her Sage shares ahead of the public announcement of the FDA's decision, thereby avoiding losses of approximately $11,140. Without admitting the allegations, Kramer consented to a final judgment permanently enjoining her from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The judgment also orders her to pay disgorgement of $11,139.60, prejudgment interest of $2,416.61, and a civil penalty of $11,139.60.

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