Drug firm exec gets 16 months in inside-trade case
Wednesday, April 23, 2014
NEWARK, N.J. (AP) — A former pharmaceutical executive has been sentenced to 15 months in prison for his role in an insider trading scheme.
John Lazorchak was sentenced Tuesday in federal court in Newark, N.J. He also will have to serve two years of supervised release once he's freed from prison and will have to forfeit $3,000.
Lazorchak was director of financial reporting at Celgene Corp. when he was arrested in November 2012 along with five other people. One of the others was Mark Cupo, an executive at French drugmaker Sanofi Aventis' U.S. headquarters in Bridgewater, N.J.
All six defendants have pleaded guilty. Lazorchak pleaded guilty in the fall to conspiracy and five counts of securities fraud.
The U.S. attorney's office contends the men used inside information to exploit deals involving the two pharmaceutical firms and other companies.
From 2007 to 2012, Lazorchak regularly disclosed nonpublic information about Celgene's anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news to Cupo, prosecutors said. He did this with the expectation that Cupo would pass the information to a "friend" who would trade in the securities of Celgene or its target acquisition companies, then share the profits with Lazorchak and Cupo.
However, Cupo passed the information on to two friends who each made more than $500,000 through trading. The two also passed certain Celgene inside information to friends and family members.
Cupo was sentenced last week to 16 months in prison.
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