WESTON, Conn. -- A 70-year-old Weston man was found guilty on Tuesday of insider trading by a federal jury in Hartford found, prosecutors said.
The trial for Edward J. Kosinski before U.S. District Judge Vanessa Bryant on Nov. 13, and the jury returned its verdict Tuesday afternoon.
According to evidence presented at trial, Kosinski entered into a clinical study and research agreement with an agent of Regado Biosciences in January 2014.
As a principal investigator for Regado's clinical trial, he was required to maintain in strict confidence all confidential information he received from Regado during the course of the trial. In May 2014, Kosinski owned 40,000 shares of Regado common stock, prosecutors said.
On June 29, 2014, Kosinski and other investigators were informed by the clinical trial team that there had been severe allergic reactions during the clinical trial and that the acceptance of new subject was put on hold.
The next day, Kosinski sold his 40,000 shares of Regado stock for between $6.59 and $7 per share. On July 2, 2014, Regado publicly announced that patient enrollment had been suspended while the DSMB conducted a review of the clinical trial.
On July 3, 2014, the stock price fell $3.95 from the day's previous closing, to close at $2.81. By selling his shares of the Regado stock, Kosinski avoided a loss of about $160,000, according to prosecutors.
On July 29, Kosinski and other principal investigators were informed that there was a death in the rial, and that the trial was put on hold. Two days later, while in possession of this non-public information, Kosinski purchased 50 Regado common stock put option contracts, with a strike price of $2.50. In August, Regado publicly announced it had permanently halted the clinical trial, and its stock price fell 60 percent.
Kosinski then purchased 5,000 shares of Regado common stock for approximately $1.13 per share and exercised his put option, netting more than $3,000, according to Durham.
Kosinski was convicted of two counts of securities fraud-insider trading, an offense that carries a maximum term of 20 years in prison on each count. The sentencing date is not scheduled.
Kosinski is released on $500,000 bond pending sentencing.
In a related federal civil matter, Kosinski has been charged by the Securities and Exchange Commission in the case.
The verdict was announced by John H. Durham, U.S. Attorney for Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the FBI.
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