SEC Settles Cheryl Kramer Insider Trading Case Tied to Sage Therapeutics FDA Denial
SEC settles insider trading claims against Cheryl Kramer over Sage Therapeutics shares, alleging she avoided $11,140 in losses before an FDA decision.
Summary
The SEC filed a settled insider trading action against Maryland resident Cheryl R. Kramer on September 24, 2026, in the U.S. District Court for the District of Maryland, Securities and Exchange Commission v. Cheryl R. Kramer, No. 1:26-cv-03786. The SEC alleges Kramer owed a duty of trust and confidence to a Sage Therapeutics insider who, in June 2023, learned the FDA had removed major depressive disorder from the proposed label for Sage’s primary drug candidate, attended at least one meeting about the comments and was instructed to keep them confidential. After allegedly receiving that information, Kramer sold all her Sage shares, including some held for more than a year, before Sage’s August 4, 2023 announcement that the FDA had denied approval for treating MDD. Sage shares fell 53%, and Kramer allegedly avoided approximately $11,140 in losses.
Without admitting the allegations, Kramer consented to a final judgment, subject to court approval, permanently barring violations of Exchange Act Section 10(b) and Rule 10b-5. She would pay $11,139.60 in disgorgement, $2,416.61 in prejudgment interest and a $11,139.60 civil penalty. Cassandra Arriaza, Jeffrey Cook and J. Martin Shanahan conducted the investigation under Celia Moore of the SEC’s Boston Regional Office, with assistance from FINRA. The SEC published Litigation Release No. 26652 on September 29, 2026.
Positives
- $11,139.60 in disgorgement and an equal civil penalty would recover the alleged avoided loss and impose an additional financial sanction.
- A permanent injunction would bar future violations of Exchange Act Section 10(b) and Rule 10b-5, subject to court approval.
- FINRA assisted the SEC investigation conducted by Cassandra Arriaza, Jeffrey Cook and J. Martin Shanahan under Celia Moore’s supervision.
Risks & concerns
- Sage Therapeutics shares fell 53% after the August 4, 2023 disclosure that the FDA denied approval for treating major depressive disorder.
- The FDA removed major depressive disorder entirely from the drug candidate’s proposed label, according to the SEC complaint.
- Kramer allegedly sold all her Sage shares after receiving confidential FDA information and avoided approximately $11,140 in losses.
- The proposed judgment requires $11,139.60 in disgorgement, $2,416.61 in interest and a $11,139.60 civil penalty.
