Cardiologist Dr. Edward Kosinski Charged with Insider Trading
The SEC alleges that Dr. Edward Kosinski of Weston, Connecticut, traded in advance of two negative news announcements by Regado Biosciences, which was pursuing a drug called REG-1 to regulate clotting in patients undergoing coronary angioplasty. Kosinski, who served as principal investigator of the drug trial, got advance notice that patient enrollment in the trial was being suspended because patients had experienced severe allergic reactions. He allegedly sold all 40,000 shares of his Regado stock the following day to avoid approximately $160,000 in losses when the news became public and the stock price dropped. A month later, Kosinski received advance notice that enrollment would be permanently halted because a patient had died, and he was able to generate a profit through options trades betting that Regado’s stock price would drop again. Kosinski allegedly made more than $3,000 when he exercised the options after the company’s stock fell by 60 percent upon the negative news.
In a parallel case, the U.S. Attorney’s Office for the District of Connecticut today announced criminal charges against Kosinski.
The SEC’s complaint filed in federal court in Connecticut charges Kosinski with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
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