You are here

Justice News

Department of Justice
U.S. Attorney’s Office
District of Connecticut

FOR IMMEDIATE RELEASE
Thursday, August 4, 2016

Weston Man Charged with Insider Trading

Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury in New Haven returned an indictment yesterday charging EDWARD J. KOSINSKI, 68, of Weston, with insider trading.

As alleged in the indictment, on January 29, 2014, KOSINSKI entered into a Clinical Study and Research Agreement with an authorized agent of Regado Biosciences, Inc., formerly a Delaware corporation whose common stock traded on the NASDAQ under the ticker symbol “RGDO.”  KOSINSKI, as a Principal Investigator for Regado’s clinical trial, was required to maintain in strict confidence all confidential information it received from Regado or its agent during the course of the clinical trial.  In May 2014, KOSINSKI owned 40,000 shares of Regado common stock.

The indictment further alleges that, on June 29, 2014, KOSINSKI and other principal investigators received an email from the clinical trial team stating that there had been several allergic reactions during the clinical trial, the acceptance of new subjects was put on hold and the Data and Safety Monitoring Board (“DSMB”) would be reviewing the recent events.  On June 30, 2014, while in possession of this non-public information, KOSINSKI sold his 40,000 shares of Regado common stock for between $6.59 and $7.00 per share.  On July 2, 2014, after the close of the market, Regado publicly announced that the DSMB initiated an unplanned review of the clinical trial and patient enrollment had been suspended until the DSMB completed its review.  On July 3, 2014, the stock fell $3.95 from the days previous closing price, to close at $2.81.

It is alleged that, by selling his shares of Regado stock, KOSINSKI avoided a loss of approximately $160,000.

The indictment further alleges that, on July 29, 2014, KOSINSKI and other principal investigators received an email from the clinical trial team stating that a death occurred in the clinical trial and that the trial was on hold.  On July 31, 2014, while in possession of this material, non-public information, KOSINSKI purchased 50 Regado common stock put option contracts with a strike price of $2.50.  On August 25, 2014, before the market opened, Regado publicly announced that it permanently halted the clinical trial and the price of Regado common stock fell approximately 60 percent.  KOSINSKI then purchased 5,000 shares of Regado common stock for approximately $1.13 per share and exercised his put options, netting more than $3,000.

The indictment charges KOSINSKI with two counts of securities fraud-insider trading, an offense that carries a maximum term of imprisonment of 20 years.  KOSINSKI appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford, entered a plea of not guilty to the charges and was released on a $500,000 bond.

The case has been assigned to U.S. District Judge Vanessa L. Bryant in Hartford.

U.S. Attorney Daly stressed that an indictment is not evidence of guilt.  Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Heather Cherry.

In a parallel action, the Securities and Exchange Commission today announced related civil charges against KOSINSKY.  (Securities and Exchange Commission v. Edward J. Kosinski 3:16-cv-01322)

Topic: 
Securities, Commodities, & Investment Fraud
Updated August 4, 2016