Skip to main content
Press Release

Former Pharmaceutical Executive Sentenced To 16 Months In Prison For Central Role In Insider Trading Scheme

For Immediate Release
U.S. Attorney's Office, District of New Jersey

Defendant and Conspirators Netted $1.4 Million in Illicit Profits over Five Years

NEWARK, N.J. - A former executive of a pharmaceutical technology firm was sentenced today to 16 months in prison for playing a central role in an insider trading scheme that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.

John Lazorchak, 43, of Long Valley, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a six-count information charging him with one count of conspiracy to commit securities fraud and five counts of securities fraud. Judge Hayden imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

Lazorchak was director of financial reporting at Celgene Corp., a global pharmaceutical company based in New Jersey. Mark Cupo, 53, of Morris Plains, N.J., a friend and former boss of Lazorchak, held a similar position at Sanofi-Aventis, another New Jersey-based global pharmaceutical company. Another conspirator, Mark Foldy, 44, of Morris Plains, a friend and high school classmate of Lazorchak, was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey.

In their respective positions, Lazorchak, Cupo, and Foldy became privy to certain material information, including merger and acquisition plans, and – with respect to Lazorchak – quarterly earnings results and decisions on regulatory applications, before such information was made public.

From 2007 to 2012, Lazorchak regularly disclosed non-public information about Celgene’s anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news to Cupo with the expectation that Cupo would pass the information to a “friend” who would trade in the securities of Celgene or its target acquisition companies and then share the profits with Lazorchak and Cupo. 

There were, in fact, two “friends” to whom Cupo passed non-public material information: Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J. Both Grum and Castelli traded on the inside information and made more than half a million dollars in profits apiece. Grum and Castelli also passed certain Celgene inside information to friends and family members.

Lazorchak funneled information about Celgene’s anticipated acquisition of Pharmion Corp. in 2007 to his high-school friends, Foldy and Michael Pendolino, 44, a New Hampshire-based chiropractor. In the months leading up to the deal, Foldy and Pendolino traded on the inside information for a profit and broadened the insider trading network by tipping family members and other friends.

In May 2010, Lazorchak informed Cupo of Celgene’s then-confidential plans to acquire Abraxis BioScience Inc. After receiving the information from Cupo, Grum and Castelli purchased Abraxis stock and sold it immediately after the June 30, 2010, acquisition announcement. Grum and Castelli collectively made more than $150,000 in profits and paid thousands of dollars in cash to Cupo, to be shared with Lazorchak.

Between February and March 2011, Foldy informed Lazorchak of Stryker’s then-confidential plans to acquire Orthovita Inc. as payback for the Pharmion deal back in 2007.  Foldy also tipped other friends and family members about the Orthovita deal.

Lazorchak passed the Orthovita tip to Pendolino and Cupo. Pendolino not only traded on the Pharmion-related inside information himself, but also passed it on to another high school friend. Cupo gave the information to Grum and Castelli, who traded for substantial profits and gave a cash portion back to Cupo, for distribution amongst Cupo, Lazorchak, and Foldy.

Over the course of the five-year scheme, the conspirators collectively reaped more than $1.4 million in illicit profits by trading ahead of at least 11 corporate news events that Lazorchak or Cupo revealed to them prior to public announcement.

In addition to the prison term, Judge Hayden sentenced Lazorchak to two years of supervised release and ordered him to forfeit $3,000.

Lazorchak is the fifth defendant charged with participating in this insider trading network to be sentenced. On April 9, 2014, Grum was sentenced to one year and one day in prison and Castelli was sentenced to nine months in prison. On April 16, 2014, Cupo was sentenced to 16 months in prison and Foldy was sentenced to two years of supervised release with six months of home confinement and electronic monitoring. The sixth and final charged defendant, Michael Pendolino, is scheduled to be sentenced by Judge Hayden on May 5, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentences. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit


Defense counsel:
John Lazorchak:  Lawrence S. Lustberg Esq. and Amanda B. Protess, Esq., Newark
Mark Cupo:  Joseph J. Bell Esq. and Joseph J. Bell, IV Esq., Rockaway, NJ
Lawrence Grum:  Scott A. Resnik Esq., New York
Michael Castelli:  Daniel Zinman Esq. and Daniel Stein Esq., New York
Mark Foldy:  Jonathan Marks Esq., New York
Michael Pendolino:  James S. Friedman Esq., Newark                                                           

Updated March 18, 2015