Frank Glassner, Securities Fraud, New York 2021

Insider Trading Scandal Rocks Executive Ranks

A California executive compensation consultant has pleaded guilty to securities fraud for insider trading, marking a significant blow to the business community.

According to the plea agreement, Frank Glassner, a principal of an executive compensation consulting firm based in Novato, California, misappropriated material, non-public information from his client, Kadmon Holdings, Inc., to make personal trades and line his own pockets.

Between July 2021 and September 2021, Kadmon, a publicly-traded biopharmaceutical company, engaged Glassner and his firm to provide executive compensation consulting services related to a potential acquisition by Sanofi, S.A. During this time, Glassner had access to the material, non-public information, which he used to trade Kadmon stock and call options from August 3, 2021, to August 23, 2021.

On September 8, 2021, Kadmon publicly announced that it had agreed to be acquired by Sanofi for a per-share price significantly above the share price at which Kadmon was trading. As a result, Kadmon’s share price increased by approximately 71%, and Glassner profited $368,000 on the Kadmon stock and call options he had previously purchased.

Glassner, 68, of Novato, California, pleaded guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison. As part of his plea agreement, he has agreed to forfeit $368,000.

The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Glassner is scheduled to be sentenced by U.S. District Judge Lewis J. Liman on December 6, 2022.

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