By Chelsey Dulaney

The Securities and Exchange Commission on Monday charged five Florida residents, including two lawyers and an accountant, with insider trading ahead of Gilead Sciences Inc.'s 2011 acquisition of Pharmasset Inc.

The SEC said attorneys Robert L. Spallina and Donald R. Tescher and accountant Steven G. Rosen traded on information obtained from a mutual client who served on the board of Pharmasset. According to the SEC, the Pharmasset board member and his advisers, including Messrs. Spallina, Tescher, and Rosen, talked about Pharmasset's negotiations to sell the company during a meeting about tax and estate planning on Nov. 8, 2011.

Afterwards, Messrs. Spallina, Tescher, and Rosen allegedly bought Pharmasset securities.

The SEC said Mr. Spallina also told Thomas J. Palermo, a financial adviser at a brokerage firm, and Brian H. Markowitz, his next-door neighbor at the time, about the potential deal with Gilead, a pharmecuetical company whose drugs include Hepatitis C treatment Sovaldi. Both then bought shares based on Mr. Spallina's tips, the SEC said.

After Gilead announced its deal on Nov. 21, 2011, the price of Pharmasset's stock shot up 84%. The defendants sold off their holdings, making over $234,000 in illegal profits, the SEC said.

The defendants have collectively agreed to pay about $489,000 to settle the charges. The settlements are subject to court approval.

Mr. Spallina's attorney declined to comment. Attorneys for Messrs. Tescher, Rosen, Palermo and Markowitz couldn't immediately be reached for comment.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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(END) Dow Jones Newswires

September 28, 2015 13:28 ET (17:28 GMT)

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