Some old high school buddies who went on to profit from insider information on deals at Celgene ($CEL) and Sanofi ($SNY) are now facing sentencing after pleading guilty to securities fraud and conspiracy.
Celgene's former head of financial report, John Lazorchak, copped a plea on securities fraud and conspiracy after being accused of orchestrating the 5-year insider trading scheme along with Mark Cupo, who worked at Sanofi. Two of their buddies, Michael Pendolino of Nashua, NH, and Mark Foldy of Morris Plains, NJ, also pleaded guilty to various related charges.
Two different sets of friends were swept up last fall as the feds were wrapping up a number of investigations into insider trading related to biopharma deals. Checking up on a series of related trades executed around the time Celgene bought Pharmion in 2007 and Sanofi acquired Chattem in 2010, federal investigators say they were able to link the network together.
The insiders were also charged with sharing information about quarterly reports as well as a soured Revlimid application. Then one of the group was turned into an informant, and agreed to wear a wire--providing the proof they needed to make the charges.
The group allegedly made about $1.5 million in illicit profits.
- here's the AP report