Novato Man Charged In $400K Insider Trading Scheme: DOJ

NOVATO, CA — A Novato man earlier this week was charged by multiple federal agencies in connection with an insider trading scheme in which he pocketed over $400,000, prosecutors said.

Frank Glassner, 68, was charged with two counts of securities fraud that carry maximum sentences of 20 and 25 years, respectively, according to the Department of Justice.

In a parallel action, the Securities and Exchange Commission filed criminal charges against Glassner alleging he violated antifraud provisions of the Securities and Exchange Act of 1934.

Glassner is accused of cashing in on advanced knowledge of the impending sale of Kadmon, a biotech company for which he served as a consultant, to a rival firm, prosecutors said.

The SEC's complaint alleges that within thirty minutes of first learning about the acquisition of Glassner by rival Sanofi, Kadmon reactivated a dormant brokerage account and over the next three weeks used the confidential information to purchase Kadmon stock and call options in advance of the Sept. 8, 2021, acquisition announcement.

Glassner reaped illicit profits totaling approximately $405,000, prosecutors said.

“As an advisor to Kadmon Holdings, Frank Glassner is alleged to have illegally taken advantage of his access to nonpublic information regarding the company’s acquisition to front run trades for himself,” U.S. Attorney Damian Williams said in a statement.

“Glassner’s alleged attempts to illegally game the markets may have given him a profitable edge, but they also exposed him to a much riskier downside — criminal liability for insider trading.”

Glassner's alleged misconduct was detected by the SEC's Market Abuse Unit, which uses data analysis tools to uncover a variety of fraudulent trading schemes.

“We allege Glassner used confidential information he was privy to as a consultant to trade in advance of a company’s acquisition and then to cash in after the deal was publicly announced,” FBI Assistant Director-in-Charge Michael J. Driscoll said in a statement.

“This type of illicit action makes markets unfair and creates an atmosphere of distrust. Our work investigating insider trading hopefully restores faith for investors who need to believe in the process.”