I left FINRA offices in July 2015 completely devastated. I didn't know what was to come, but I was pretty sure my life would never be the same. I didn't sleep or eat for the next three days. I told my wife and she did her best to comfort me. I told my family and friends. I told my colleagues at Zacks. The response was universal disbelief; Why on earth would you do such a thing? I didn't know what to say. I didn't really have a good answer. I was in a daze.
Reasonably sure the SEC was going to come after me, I hired a lawyer. The first step was the determine just how much "insider" trading I committed. I went back over all my brokerage statements starting in 2012 up until the day I got fired. I placed over 400 trades between late 2012 and the middle of 2015. I had made around $350,000 in profits during that time. Oh, shit, I thought; I'm going to prison.
It took me a week to match up each trade with a Zacks report or article. When I was done with the analysis, I felt immensely better about my situation. Yes, there were around 80 times out of 400 that I traded around a report from Zacks, but the net profit from all this activity was only around $65,000. There was a time a CEO copied me on an email to an investment banker talking about a pending in-licensing transaction. I made around $6,000 on that trade. That was stupid and I wasn't thinking when I made that trade, but surely this wouldn't warrant a prison sentence! I would give the money back and pay a fine. Life will go on.
Feeling better about life, I started BioNap, Inc., BioNap is a strategic consulting business designed to help small biopharma companies navigate the world of investor relations and social media. It also provides advice on business development transactions without having to hire traditional NYC investment banking (IB) or investor relations (IR) firms that charged an arm and a leg. I was smart, connected, and super motivated. I could do for clients what an IB or IR firm could do for about 1/10th of the cost. I wrote research, reviewed presentations, did financial modeling and conducted market research, I gave advice, and I connected CEOs and CFOs with investors on a daily basis. It was hugely successful.
In July 2015, I was pretty sure my life was over. In 2016, BioNap made $438,000. I had not only survived, but I had also thrived. The SEC fine loomed over my head, but I went into 2017 optimistic about my future.
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