CEO of PixarBio Corporation sentenced to prison for defrauding investors

pharmafile | February 19, 2020 | News story | Research and Development Biopharmaceuticals, CEO, FDA, corruption, fraud, investors 

Frank Reynolds, the CEO of Boston based PixarBio Corporation, was sentenced to seven years in prison for defrauding investors and obstructing a federal investigation.

This follows a federal jury convicting Reynolds back in October, in which they said he had carried out manipulative trading of the company’s shares to defraud investors while making false statements about the company’s finances and the timeline for the FDA’s approval.

Reynolds had told investors that one of their new drugs, NeuroRelease, would end opiate addcition, but evidence showed the company had only developed a new means of delivery in a time-release form for post-operative pain. Reynolds also claimed the drug cured his own paralysis, but he had never been paralyzed.

Prosecutors also said that Reynolds had directed his co-conspirators, Kenneth Stromsland and Jay Herod, to carry out manipulative trading in PixarBio shares which helped artificially inflate the stock’s trading price.

Reynolds had also misled the US Securities and Exchange Commission about the trading. They showed that a document claiming $300,000 in trading proceeds that Herod gave Reynolds, but was actually an investment unrelated to trading.

Reynolds has also been sentenced to three years of supervised release. following his prison sentence. and has been order to pay $280,000 in forfeiture and roughly $7.5 million in restitution.

Conor Kavanagh


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