Gerard Ryan of Oxford, Mississippi, pleaded guilty on Mar. 26 to one count of securities fraud related to insider trading involving confidential information from a Manhattan-based pharmaceutical company. The announcement was made by United States Attorney for the Southern District of New York Jay Clayton and James C. Barnacle, Jr., Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation.
The case centers on Ryan’s use of nonpublic information about drug approval from Kadmon Pharmaceuticals, which he obtained from a family member employed at the company during the summer of 2021. Prosecutors said that this conduct undermines market integrity and investor trust.
“As he admitted today, Gerard Ryan transformed confidential drug approval information into profits for himself and others,” said U.S. Attorney Jay Clayton. “Trading on stolen information harms both other market participants and the marketplace itself. SDNY’s Securities and Commodities Fraud Task Force will continue to work with our law enforcement partners to protect American markets and investors.”
According to court documents, Kadmon Pharmaceuticals developed Rezurock, a treatment for chronic graft-versus-host disease, and was seeking approval from the Food and Drug Administration in 2021. On July 16 that year, Kadmon announced FDA approval for Rezurock after maintaining strict confidentiality policies regarding such sensitive business developments.
Despite these policies—which included warnings that ongoing engagement with regulators was “HIGHLY CONFIDENTIAL”—Ryan received material nonpublic information from his family member before it became public knowledge. He then purchased thousands of shares in Kadmon just after learning about FDA approval but before any public announcement had been made.
Ryan also shared this inside information with an associate who bought additional shares based on his tip prior to public disclosure by Kadmon.
Ryan faces up to 20 years in prison as a result of his plea before U.S. District Judge John P. Cronan. Clayton praised the investigative work conducted by the FBI throughout this case.
