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”), pled guilty 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”). GLASSNER was arrested in May of this year and pled guilty on Friday, August 19, 2022, in Manhattan federal court before U.S. District Judge Lewis J. Liman.
U.S. Attorney Damian Williams said: “As he admitted in court, Frank Glassner misappropriated his client’s material, non-public information about an upcoming acquisition to make personal trades and line his own pockets. Glassner now awaits sentencing for his crime, and must also forfeit his illicit profits”
According to the Information to which GLASSNER pled guilty, the complaint that was filed in this case, and statements made during court proceedings:
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.
As part of his plea agreement, GLASSNER has agreed to forfeit $368,000.
GLASSNER is scheduled to be sentenced by Judge Liman on December 6, 2022.
GLASSNER, 68, of Novato, California, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which brought a related civil action against GLASSNER.
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