California Executive Compensation Consultant Sentenced To Prison For Committing Insider Trading
Damian Williams, the United States Attorney for the Southern District of New York, announced that FRANK GLASSNER, a principal of an executive compensation consulting firm based in Novato, California (the “Consulting Firm”), was sentenced to one year and one day in prison by U.S. District Judge Lewis J. Liman. Glassner pled guilty on August 19, 2022, to one count of securities fraud in connection with his scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that Kadmon Holdings, Inc. (“Kadmon”) – which GLASSNER and the Consulting Firm were advising – would be acquired by Sanofi, S.A. (“Sanofi”).
U.S. Attorney Damian Williams said: “With today’s sentence, Frank Glassner must face the consequences of trading on inside information. This conviction and sentence demonstrates once again that we will continue to vigorously protect the integrity of our markets and hold accountable those who cheat by trading on inside information.”
According to the allegations in the Information, the complaint that was filed in this case, and statements made during court proceedings and filings:
Between July 2021 and September 2021, Kadmon, which, prior to its acquisition by Sanofi, was a publicly-traded biopharmaceutical company traded under the ticker symbol “KDMN” on the NASDAQ, engaged GLASSNER and the Consulting Firm to provide executive compensation consulting services related to a potential acquisition. In connection with this engagement, GLASSNER had access to material, non-public information, which he misappropriated and, in violation of the duties that he owed to Kadmon, used to trade Kadmon stock and call options between on or about August 3, 2021, and on or about August 23, 2021. On September 8, 2021, Kadmon publicly announced that it had agreed to be acquired by Sanofi for a per-share price significantly above the share price at which Kadmon was trading. That day, Kadmon’s share price increased by approximately 71%, and GLASSNER ultimately profited $368,000 on the Kadmon stock and call options he had previously purchased.
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In addition to his prison sentence, GLASSNER, 68, of Novato, California, was ordered to pay forfeiture in the amount of $368,000.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which brought a related civil action against GLASSNER.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Gina Castellano is in charge of the prosecution.