A Fairfield cardiologist who owned a stake in a New Jersey biotech will serve six months in prison for ditching his shares before an impending stock fall, prosecutors say.
Dr. Edward J. Kosinski, 70, of Weston, was also sentenced Tuesday to two years of supervised release and will pay a $500,000 fine after a jury in Nov. 2017 found him guilty of two counts of securities fraud-insider trading, the Connecticut U.S. Attorney’s Office said.
Kosinski is free on $500,000 bond and is due in prison Jan. 4, 2019.
In Jan. 2014, Kosinski entered into a clinical study agreement with New Jersey’s Regado Biosciences Inc., and owned 40,000 shares of Regado common stock by May that year, investigators said.
Under the agreement, Kosinski was required to conceal all confidential information he received from Regado involving the clinical trial.
However, Kosinski in June that year abruptly sold his Regado shares for between $6.59 and $7.00 per share after learning the Data and Safety Monitoring Board would be investigating several allergic reactions contracted during the trial.
Regado announced the unplanned review of the trial days later, causing its stock to close at $2.81 on July 3, 2014.
Kosinski’s stock dump helped him avoided a loss of about $160,000, authorities say.
Weeks later, Kosinski and other principals were notified a death occured in the trial and that it was on hold. Kosinski again used the confidential information to purchase 50 Regado common stock put option contracts at a price of $2.50, prosecutors said. Â
After it was announced publicly the trial would be suspended, he then purchased 5,000 shares of Regado common stock at $1.13 per share and exercised his put options, earning him over $3,000.
The Federal Bureau of Investigation investigated the case, which was prosecuted by Assistant U.S. Attorneys Heather Cherry and Jonathan Francis.
