Weston Man Could Face 20 Years for Alleged Securities Fraud Insider Trading

WESTON, CT — Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced on Thursday that a federal grand jury in New Haven returned an indictment on Wednesday charging Edward J. Kosinski, 68, of Weston, with insider trading.

On January 29, 2014, Kosinski is alleged to have entered into a Clinical Study and Research Agreement with an authorized agent of Regado Biosciences, Inc., formerly a Delaware corporation whose common stock traded on the NASDAQ under the ticker symbol “RGDO,” according to Daly. Kosinski was required to keep all confidential information received from Regado in strict confidence during the course of the clinical trial and in May 2014, Kosinski owned 40,000 shares of Regado common stock.

The indictment further alleges that, on June 29, 2014, Kosinski and other principal investigators received an email from the clinical trial team stating that there had been several allergic reactions during the clinical trial, the acceptance of new subjects was put on hold and the Data and Safety Monitoring Board (“DSMB”) would be reviewing the recent events.

On June 30, 2014, Kosinski sold his 40,000 shares of Regado common stock for between $6.59 and $7.00 per share, prosecutors said. On July 2, 2014, after the close of the market, Regado publicly announced that the DSMB initiated an unplanned review of the clinical trial and patient enrollment had been suspended until the DSMB completed its review, according to the U.S. District Attorney. On July 3, 2014, the stock fell $3.95 from the days previous closing price, to close at $2.81.

By selling his shares of Regado stock, Kosinski avoided a loss of approximately $160,000, prosecutors allege. The indictment charges Kosinski with two counts of securities fraud-insider trading, an offense that carries a maximum term of imprisonment of 20 years. Kosinski appeared Thursday before U.S. Magistrate Judge Robert A. Richardson in Hartford, entered a plea of not guilty to the charges and was released on a $500,000 bond. The case has been assigned to U.S. District Judge Vanessa L. Bryant in Hartford.