Ex-NJ financial analyst arrested on insider trading charge involving pharmaceutical companies

A former senior finance analyst at Merck & Co. is facing an insider trading charge after authorities said Tuesday that he passed secrets to a friend he met at college that earned $722,000 in illegal profits.

Zachary Zwerko, 32, was arrested Friday in Cambridge, Massachusetts, where he lives. He was charged with conspiracy to commit securities fraud and was awaiting an appearance in federal court in Boston.

Authorities said Zwerko fed secrets about plans for acquisitions by the Whitehouse Station, New Jersey-based Merck to a former schoolmate at Rutgers Business School. According to a criminal complaint, the ex-schoolmate then traded on the information, earning the illegal profits.

The Securities and Exchange Commission brought separate civil claims against Zwerko.

Zwerko's Boston lawyer did not immediately return a phone call seeking comment.

"As alleged, Zachary Zwerko was a spy in the camp of his own company who passed secret merger and acquisition information to his co-conspirator so that lucrative illegal trades could be made," Manhattan U.S. Attorney Preet Bharara said.

Zwerko was charged with carrying out the crime from at least 2012 until his arrest. The charge carries a potential penalty of up to five years in prison.