A former Sanofi (SAN) executive who cooperated with prosecutors was sentenced to 16 months in prison by a judge who called him a leader of an insider-trading ring that made $1.4 million in profit off pharmaceutical and medical-technology company tips.

Mark Cupo, 53, was sentenced yesterday in federal court in Newark, New Jersey, to a longer term than the two men he helped convict. Cupo pleaded guilty Oct. 7 after making secret recordings for authorities of the two primary traders in the ring, Lawrence Grum, 50, who was sentenced April 9 to a year and a day in prison, and Michael Castelli, 50, who got nine months.

Cupo, who faced from 46 to 57 months in prison, asked for probation, citing his help to authorities in unraveling a five-year scheme that relied on tips from executives at Celgene Corp. (CELG), Sanofi and Stryker Corp. (SYK) The judge said Cupo and a former Celgene executive who pleaded guilty, John Lazorchak, were the primary architects of the scheme. Lazorchak will be sentenced April 22.

The ring, which operated from 2007 to 2012, involved two sets of high school friends and Cupo making secret recordings for the Federal Bureau of Investigation, authorities said.

The tips involved Celgene’s announcement in November 2007 that it was buying Pharmion Corp. for $2.9 billion, Sanofi’s announcement in March 2010 that it was buying Chattem Inc. for $1.9 billion, Celgene’s news in June 2010 that it was buying Abraxis BioScience Inc. for $2.9 billion and Stryker’s announcement in May 2011 of plans to buy Orthovita Inc. for $316 million, according to the U.S. Securities and Exchange Commission, which sued the men.

The tips also involved six quarterly earnings reports by Celgene and the company’s announcement in June that it was withdrawing an application in Europe for expanded use of its blood cancer drug Revlimid, according to the government.

Source:

http://www.bloomberg.com/news/2014-04-16/ex-sanofi-executive-gets-16-months-for-insider-trading.html

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