A federal judge wants biotech investor David Blech behind bars. Blech pleaded guilty last year to trading schemes involving stocks in the biotech companies Pluristem Therapeutics ($PSTI) and Intellect Neurosciences ($ILNS), and yesterday he and his attorney asked U.S. District Judge Colleen McMahon in Manhattan for leniency in his sentencing. The answer was "no," and the judge ordered Blech to serve four years in prison, The Associated Press reported.
"I'm afraid you had all the mercy you're going to get. Now it's time for punishment," McMahon said, as quoted by the news wire. "No, not this time. No mercy!"
More mercy is what Blech needed. The repeat stock manipulator avoided jail time in 1999 for a fraud conviction in the prior year, Bloomberg reported. In that case, Blech got nailed for cheating a bevy of broker-dealers and Bear Stearns out of $16 million, and he managed to get probation rather than potential jail time of more than 8 years. Yet after his probation ended, Blech was back to his old ways, saying that he began manipulating trading in Pluristem after investing $1 million in the developer in 2006 as he endeavored to crawl out of debt with family and investors.
Blech has blamed his criminal behavior on his bipolar disorder and pleaded with the judge in his latest case to take his illness, gambling addiction and family situation (which includes a son with autism) into account in her sentencing decision. In rejecting his request, the judge handed down the prison sentence as well as $1.3 million forfeiture. He's due to report to the slammer in August, where he'll have some time to contemplate his steep fall from grace.
Blech built a fortune of more than $300 million after early bets on biotech stocks, gaining recognition as one of the wealthiest Americans in Forbes in 1992, the AP reported. Yet his wealth has vanished since he closed his investment company in 1994. And as of his latest court appearance, he claims to have zero assets and $9 million of debt.
- check out the AP article
- and the Bloomberg report