Novato man sentenced to prison for insider trading [The Marin Independent Journal, Novato, Calif.]

Dec. 19—A Novato executive compensation adviser has been sentenced to one year and one day in federal prison and must forfeit $368,000 in ill-gotten gains following a conviction for insider trading.

Frank Glassner, 68, pleaded guilty in August in federal court in New York to one count of securities fraud. U.S. District Judge Lewis Liman sentenced him Dec. 6.

Glassner admitted that he learned a client, Kadmon Holdings Inc., would be acquired by another company, Sanofi S.A., and that he used the information to make a six-figure profit off Kadmon's stock when it shot up 71% thanks to the 2021 merger, according to court records.

In court filings, the defense attributed the scheme to poor judgment stemming from heartache, chronic pain, mind-altering substances and depression. Glassner's attorney, Christopher Cannon, said Glassner is sorry for his "tragic mistake."

"When you compare that mistake to his lifetime of accomplishments, people will see a good man," Cannon said. "No one should be judged by his worst day."

Originally charged with two counts of securities fraud, Glassman, if convicted, could have faced up to 20 years in prison on one and 25 years on the other.

The Securities and Exchange Commission filed a separate federal civil suit seeking additional civil penalties and a permanent injunction against Glassner. That case remains pending.

Glassner sought leniency, saying he was a chronic pain patient who, at the time of his crimes, was taking daily cocktails of prescription opioids and benzodiazepines that clouded his judgment.

Glassner said the profits from his scheme were meant to pay attorney fees he owed in civil litigation against a former romantic partner and that now, although he had recently married happily, he was on the verge of bankruptcy.

"Glassner was desperate to continue the fight," Cannon wrote. He said Glassner, now "a broken man with an uncertain future," was unlikely to ever commit another crime.

"As soon as he was confronted with his actions, Glassner admitted his wrongdoing, apologized, and has been preparing for this day of reckoning," Cannon wrote on Nov. 22, arguing for probation with home confinement rather than imprisonment.

While sentencing guidelines could have put Glassner in prison for 30 to 37 months, the U.S. Probation Office recommended 24 months, according to court records.

Prior to the sentencing, the prosecution asked the judge to reject Glassner's "repeated attempts to minimize the offense by arguing that there are no identifiable victims," and argued that deterring insider trading was worth sending Glassner to prison.

"Imposing a term of probation here would risk sending the message that prosecutions for insider trading are simply a price of doing business that can be written off with a fine," Assistant U.S. Attorney Gina Castellano wrote on Nov. 29.

Glassner, in a Dec. 1 letter to the judge, conceded that his scheme was "entirely unacceptable, wrong, beyond stupid and foolish, and worst of all criminal."

"I realize that my engaging in insider trading was, and is, completely vile and reprehensible, and I shall punish myself for my actions every day until I die," Glassner wrote. "In a moment of financial desperation, I thought I saw a way out."

Glassner is scheduled to report to prison on April 24. He will have to spend three years on supervised release when he gets out of prison, and will have to provide probation officers with any financial information they request, among other conditions, according to court records.

"With today's sentence, Frank Glassner must face the consequences of trading on inside information," U.S. Attorney Damian Williams said in a prepared statement on Dec. 6. "This conviction and sentence demonstrates once again that we will continue to vigorously protect the integrity of our markets and hold accountable those who cheat by trading on insider information."

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