A Weston doctor has been sentenced by a federal court to six months in prison, two years of supervised release and a $500,000 fine for insider trading.
Edward J. Kosinski, a former cardiologist at St. Vincent’s Medical Center in Bridgeport, was found guilty last November of two counts of securities fraud-insider trading. The charges came after Kosinski profited on confidential information related to clinical trials involving medication being tested by Regardo Biosciences Inc., a Delaware corporation that employed Kosinski as a principal investigator and authorized agent in January 2014. Kosinski owned 40,000 Regado shares by May 2014, but in the following month, he was informed of several allergic reactions during a clinical trial, resulting in the suspension of testing on new subjects. Kosinski used this knowledge to sell all of his shares in Regado on June 30, 2014, for between $6.59 and $7.00 per share. Two days later, Regado publicly announced that the Data and Safety Monitoring Board launched an unplanned review of the clinical trial. The company’s stock fell to $2.81, and federal investigators claimed that Kosinski avoided a loss of approximately $160,000 by using his insider information to jettison Regado shares.
On July 29, 2014, Kosinski was informed by the clinical trial team stating that a death occurred in the clinical trial and that the trial was on hold. Two days later, he purchased 50 Regado common stock put option contracts with a strike price of $2.50. On Aug. 25, 2014, before the market opened, Regado publicly announced that it permanently halted the clinical trial and the price of Regado common stock fell approximately 60 percent. Kosinski bought 5,000 shares of Regado common stock for approximately $1.13 per share and exercised his put options, resulting in a profit of more than $3,000.
Kosinski, who is released on a $500,000 bond, was ordered to report to prison on Jan. 4, 2019.