Former biotech analyst Jason Napodano sentenced to a short stretch in a federal prison for securities fraud
Former biotech analyst Jason Napodano will be spending this fall in a federal penitentiary.
After settling up with the SEC last year on a slate of charges that he had cooked up a scheme to make a small amount of money by trading penny stocks using insider information — while lying about not having any interest in the stocks he covered as a senior biotech analyst for Zacks Capital — a federal judge in Chicago has sentenced him to a short, 4-month stretch in prison based on his guilty plea to one count of securities fraud.
The prison sentence will be followed by a year on probation, with the first four months on house confinement.
The judge recommended that he be imprisoned in the medium-security federal penitentiary in Otisville, NY, under orders to surrender by 2pm on August 7.
The US Attorney’s Office in Chicago had alleged that Napodano managed to glean $143,865.48 from the insider trading scheme, a collection of mostly two-bit trades. That was the same amount he agreed to pay — alongside a similar amount for a fine — in settling with the SEC. Napodano was charged alongside Bilal Basrai, a broker at LBMZ Securities (formerly Zacks & Company), who prosecutors said opted to cooperate in the case.
Napodano is barred from meeting or communicating with Basrai, according to the sentencing statement.
Another LBMZ exec, Bryce Stirton, also settled the SEC insider trading charges after agreeing to give up a little more than $2,000, plus pay a similar fine.
Napodano specialized in covering biotech penny stocks, a favorite of the daytrader crowd dreaming of a big score. Well known in certain circles, and quoted on occasion by some observers, Napodano has agreed to stay out of the analyst game.