(Bloomberg) -- An executive pay consultant will spend a year and a day behind bars for insider trading in connection with Sanofi SA’s $1.9 billion acquisition of biotech firm Kadmon Holdings Inc.
Frank Glassner, 68, was sentenced Tuesday in New York by US District Judge Lewis J. Liman. He pleaded guilty to one count of securities fraud for using confidential information he got while working on the deal and then making trades in Kadmon options that earned him $368,000 in profits.
Glassner, of Novato, California, blamed his conduct on a failed romance, saying he traded on the confidential information to raise money for expensive litigation with a former partner who cheated on him.
“Glassner was desperate to continue the fight, and he foolishly, in contravention of all he knew was right, engaged in a series of transactions in Kadmon securities, making enough money to pay his outstanding legal bills and continue litigation that he thought would put him back to where he was prior to the breakup of his relationship,” his lawyers said in a sentencing memo.
Prosecutors had sought a sentence within the federal guidelines of 30 to 37 months, while Glassner’s lawyers argued a jail term was unnecessary to stop others from similar conduct because the government has “sent out a strong message” by going after individuals for insider trading.
But Liman said Glassner needed a period of incarceration to promote respect for the law. The judge said insider trading has “ripple effects” that undermine the public’s confidence in the markets.
“Your crime was a serious one,” Liman told Glassner in a Manhattan courtroom. “It is one where you knew better. It was not just an impulsive act even if it was driven by desperation.”
Sanofi agreed to buy Kadmon in September 2021 to add the company’s Rezurock drug for chronic graft-versus-host disease, an imbalance of the immune system, sending Kadmon shares surging as much as 74%.
The case is US v Glassner, 22-cr-451, US District Court, Southern District of New York.
©2022 Bloomberg L.P.