SEC v. STEVEN D. TARGUM; ELLIOT P. TARGUM; and NICHOLAS J. ROSENBERG, No. 1:24-cv-12043, District of Massachusetts (Aug. 8, 2024) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

SECURITIES AND EXCHANGE
COMMISSION,
   Plaintiff,
            v.

STEVEN D. TARGUM,
ELLIOT P. TARGUM,
NICHOLAS J. ROSENBERG,

                                    Defendants.

      Civil Action No. 24-CV-

COMPLAINT
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against defendants Steven D. Targum (“S. Targum”), Elliot P. Targum (“E. Targum”)
and Nicholas J. Rosenberg (“Rosenberg,” and collectively, “Defendants”):
SUMMARY
1. This is an insider trading action.  Defendants traded in the securities of Frequency
Therapeutics, Inc. (“Frequency”), a biotechnology company whose stock is publicly traded, in
advance of Frequency’s public announcement on February 13, 2023 that the clinical trial for its
lead product candidate, a drug intended to treat hearing loss, had failed to achieve its primary
efficacy endpoint (the “Announcement”).
2. S. Targum, a consultant to Frequency who was subject to a confidentiality
agreement with the company, obtained material nonpublic information about the clinical trial’s
disappointing results via emails sent on or about February 4, 2023.  On the next business day,
February 6, 2023, S. Targum sold all of his Frequency stock, a total of 25,000 shares.
3. S. Targum then tipped this material nonpublic information to his son, E. Targum,

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who sold about half of the Frequency shares that he owned, or 2,400 shares.  E. Targum’s sales
also took place on the morning of February 6, 2023.  E. Targum placed his order to sell
Frequency shares about six minutes after ending a phone call with S. Targum.
4. E. Targum then tipped this material nonpublic information to his close friend
Rosenberg.  Less than a minute after entering the order to sell about half of his Frequency shares,
E. Targum called Rosenberg.  Shortly after that call ended, Rosenberg sold all of the Frequency
shares he held in his individual account.  Rosenberg sold all of his remaining Frequency shares
on February 8, 2023.  In total, over those two days, Rosenberg sold about 5,000 Frequency
shares.
5. On the day of the Announcement, Frequency’s shares fell 80.6%, from a closing
price of $3.93 per share on Friday, February 10, 2023 to a closing price of $0.76 per share on
Monday, February 13, 2023.  S. Targum, E. Targum and Rosenberg avoided losses of $86,750,
$8,376, and $15,323 respectively, on their unlawful Frequency trades.
6. By trading on the confidential and nonpublic information that Frequency’s
clinical trial results were negative, S. Targum, E. Targum and Rosenberg reaped an unfair
advantage over other investors in the public markets.  They avoided losses that other investors
experienced when the price of Frequency’s shares fell dramatically after the Announcement.
7. As a result of the conduct alleged herein, S. Targum, E. Targum and Rosenberg
violated, and unless restrained and enjoined will continue to violate, Section 10(b) of the
Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder [15 U.S.C.
§78j(b); 17 C.F.R. §240.10b-5].
8. The Commission seeks permanent injunctions against S. Targum, E. Targum, and
Rosenberg, enjoining them from engaging in the transactions, acts, practices, and courses of

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business of the type alleged in this Complaint, disgorgement of ill-gotten losses avoided from the
unlawful conduct set forth in this Complaint pursuant to Section 21(d)(7) of the Exchange Act
[15 U.S.C. §78u(d)(7)], together with prejudgment interest, civil penalties pursuant to Section
21A of the Exchange Act [15 U.S.C. §78u-1], orders barring them from serving as officers or
directors of certain public companies, pursuant to Section 21(d)(2) of the Exchange Act [15
U.S.C. §78u(d)(2)], and such other relief as the Court may deem appropriate.
JURISDICTION AND VENUE
9. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 21(e),
and 27 of the Exchange Act [15 U.S.C §§78u(d)(1), 78u(e) and 78aa].
10. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15
U.S.C §78aa].  Defendants reside in the District of Massachusetts.  Also, certain of the acts,
practices, transactions and courses of business constituting the violations alleged in this
Complaint occurred within the District of Massachusetts, and were effected, directly, or
indirectly, by making use of the means or instrumentalities of transportations or communication
in interstate commerce, or the mails, including the internet and the telephone.
DEFENDANTS
11. Steven Targum, age 75, resides in Boston, Massachusetts.  He was engaged by
Frequency as a consultant on its clinical trial design from February 2021 until approximately
February 2023.  S. Targum has served as a consultant, Chief Medical Officer, Chief Medical
Advisor/Medical Director, or Scientific Director at numerous public and private pharmaceutical
and biotechnology companies and medical institutions.  He has held medical licenses in several
states, but all are currently inactive.
12. Elliot Targum, age 46, resides in Arlington, Massachusetts and is the son of S.

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Targum.  E. Targum is currently the Chief Operating Officer of a privately-held insurance
brokerage firm.
13. Nicholas Rosenberg, age 49, resides in Arlington, Massachusetts.  Rosenberg is a
licensed attorney who practices as a partner in a private law firm.  Rosenberg and his spouse are
close friends and neighbors of E. Targum and his spouse.
RELATED ENTITY
14. Frequency Therapeutics, Inc. was a Delaware corporation with a principal place
of business in Lexington, Massachusetts before its merger with Korro Bio, Inc. on November 3,
2023.  During the relevant period, Frequency’s securities were registered pursuant to Section
12(b) of the Exchange Act and traded on the Nasdaq Global Select Market under the ticker
symbol FREQ.  Frequency was a biotechnology company that focused on developing
therapeutics that would restore various human biological functions through the activation of
progenitor cells.
FACTUAL ALLEGATIONS
S. Targum’s Relationship with Frequency
15. In 2022 and early 2023, Frequency’s lead product candidate was a drug known as
FX-322, which was developed to treat the most prevalent type of hearing loss by treating the loss
of hair cells in the ear.
16. In June 2021, Frequency announced final results from the Phase 2a clinical trial of
FX-322.  The trial failed to establish that the drug produced hearing improvements in the patients
studied as compared to the placebo.  Frequency attributed the results of this study, in part, to
uncontrolled bias and a flawed study design because the placebo group showed unexpected
positive results in their hearing scores.  Frequency decided to conduct a Phase 2b clinical trial of

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FX-322 with a study design that would eliminate the placebo-related issues that it believed
negatively impacted the results of this Phase 2a trial.
17. In February 2021, Frequency hired S. Targum to consult on its clinical trials,
including the Phase 2b clinical trial of FX-322.  S. Targum worked in the field of clinical trial
design and had specific experience in the area of eliminating problems in clinical trials that arise
from the placebo effect.  The term of the Consulting Agreement was the later of (i) one year, or
(ii) until completion of the last Project Assignment, which was defined as “supporting Frequency
as a clinical trial consultant in data analysis and trial design issues.”  The Consulting Agreement
was still in force in February 2023.
18. By signing the Consulting Agreement, S. Targum acknowledged that in the
course of his performance as a Consultant, (i) he may receive confidential information, including
clinical data and related derivatives, enhancements, or improvements of clinical data, and (ii) that
he was obligated not to use or disclose such confidential information.  He also acknowledged
that he was “aware that . . . U.S. and state securities laws and regulations prohibit any person or
entity who or that has received material, nonpublic information from purchasing or selling
securities of an issuer or from communicating such information to any other person or entity
under circumstances in which it is reasonably foreseeable that such person or entity is likely to
purchase or sell such securities.”
19. Further, when S. Targum was provided access to the nonpublic clinical trial data
for the Phase 2a clinical trial of FX-322, Frequency’s General Counsel informed him in an email
message of his legal obligations to protect that “extremely sensitive and confidential” data.
Targum responded in email that he understood the General Counsel’s warnings that the clinical
trial data was “material, non-public information under Frequency’s Insider Trading Compliance

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Policy and U.S. securities laws” and that the consequences “would be severe” were someone “to
trade or cause others to trade on the basis of this information” before its public release.
20. Frequency began dosing patients in the Phase 2b study in October 2021, and
publicly announced, by early November 2022, that it expected to release data from the study in
the first quarter of 2023.
S. Targum Learned that the Phase 2b Trial Results Were “Not What People Had Hoped”
and Sold All of His Frequency Shares.

21. On Saturday, February 4, 2023 at about 4 pm, the CEO of Frequency emailed S.
Targum, copying Frequency’s General Counsel and stating “[t]he team and I would be
appreciative if you could take a few minutes tomorrow (I know. . .) to connect.”  The CEO’s
email did not otherwise indicate the reason for wanting to speak with S. Targum over the
weekend on a Sunday.
22. About two hours later, Frequency’s Chief Medical Officer emailed S. Targum
with the subject line of the email reading “Trial results.”  The body of the email said, in pertinent
part, “The results of the Phase 2b hearing study have come in.  Not what people had hoped I
think.  Might you have any time on Monday to join in the discussions?  Afternoon?”
23. S. Targum knew that the information in the email message from Frequency’s
Chief Medical Officer about Frequency’s negative clinical trial results was nonpublic and highly
confidential.
24. S. Targum responded to the CEO’s email at about 6 pm on February 5 and
indicated he was free on Monday to speak.  S. Targum and the CEO agreed to speak at 9 am on
Monday, February 6.
25. Shortly after 9 am on February 6, S. Targum received an email from Frequency’s
CEO stating that their planned 9 am call would need to be rescheduled.  At 9:10 am, S. Targum

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responded “ok.”
26. About one hour after his February 6 email exchange with Frequency’s CEO, S.
Targum called his financial adviser, C.S., and directed C.S. to sell all of S. Targum’s Frequency
shares.  During that call, C.S. reminded S. Targum that he could not trade if he had material
nonpublic information about Frequency.  When interviewed, C.S. informed the Commission’s
staff that he got the impression from his call with S. Targum that S. Targum had not
communicated with Frequency recently.
27. C.S. executed S. Targum’s order to sell all of his Frequency shares and
accordingly, S. Targum sold all 25,000 shares of Frequency he owned at a price per share of
$4.23, for total proceeds of $105,750.
28. As a Frequency consultant, S. Targum owed Frequency a duty to protect the
confidentiality of the highly sensitive and nonpublic information it gave to him about the results
of the Phase 2b clinical trial of FX-322.  S. Targum breached that duty both by trading on that
information to sell Frequency shares in his own accounts and, as described below, by providing
that material nonpublic information to his son E. Targum with the expectation of providing him
with a financial benefit.
S. Targum Tipped E. Targum About Frequency’s Negative Trial Results and E. Targum
Sold Half of His Frequency Shares.

29. On February 6, 2023, S. Targum knew that E. Targum owned shares of
Frequency.  S. Targum was the person who had introduced E. Targum to Frequency stock in the
first place at or near the time he began working as a Frequency consultant.  E. Targum purchased
Frequency shares because he thought that S. Targum’s work on Frequency’s clinical trial design
would help the drug succeed.
30. On February 6, about one minute after responding to the Frequency CEO’s email

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cancelling their meeting, S. Targum called E. Targum and they spoke for 8 minutes and 40
seconds.  That call ended at about 9:20 am.
31. About one minute after ending the call with his father, at 9:21 am, E. Targum
logged onto the online system for the brokerage account in which he held his Frequency stock.
Also, at 9:21 am, E. Targum placed a call to his friend Rosenberg, which call lasted 23 seconds.
During an investigation into the Defendants’ trading activities, the Commission subpoenaed E.
Targum to give testimony under oath.  During his testimony on August 31, 2023, E. Targum
testified that he believes that he did not speak to Rosenberg during the 9:21 am call, but rather
left a message.
32. E. Targum remained logged into his brokerage account’s online platform for
about 37 minutes that morning, until 9:58 am.
33. E. Targum tried calling his father at 9:25 am but they did not connect by phone.
They then exchanged a text message at 9:25.  S. Targum then called E. Targum at 9:38 am and
they spoke for close to 8 minutes, until almost 9:46 am.
34. During one of the calls between S. Targum and E. Targum on the morning of
February 6, S. Targum and E. Targum discussed the fact that the CEO of Frequency had
scheduled a call with S. Targum for that morning, and then cancelled the call.
35. During one of the calls between S. Targum and E. Targum on the morning of
February 6, S. Targum conveyed, in substance, to E. Targum the material, nonpublic information
that the results of Frequency’s Phase 2b clinical trial for FX-322 were negative.
36. When S. Targum provided information to E. Targum about the negative results of
Frequency’s clinical trial, S. Targum gave E. Targum an illicit gift of confidential, material
nonpublic information that E. Targum could use to avoid losses by selling his Frequency shares

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in advance of the public announcement of the clinical trial results.  S. Targum knew or recklessly
disregarded that E. Targum would use the information he provided to sell Frequency shares.
37. When E. Targum received information about Frequency’s negative clinical trial
results from his father, E. Targum knew or recklessly disregarded that his father had no
legitimate business purpose in providing him with that material nonpublic information and that
S. Targum was breaching his duty of confidence to Frequency by sharing that information with
him.
38. After hanging up from the phone call with his father, E. Targum made several
changes to the order he had entered on his online brokerage platform.  At 9:52 am, about 6
minutes of ending the call with his father, E. Targum submitted the order to his brokerage firm to
sell about half of the Frequency shares he owned.
39. E. Targum’s brokerage firm executed his order that day and E. Targum sold 2,400
shares of Frequency at a price per share of $4.25, for total proceeds of $10,200.  E. Targum
retained 2,365 shares of Frequency stock and did not sell them in February 2023.
E. Targum Tipped Rosenberg About Frequency’s Negative Trial Results and Rosenberg
Sold All of His Frequency Shares.

40. During his testimony under oath to the Commission on August 31, 2023, E.
Targum described Rosenberg as a “close” friend.  They have known each other since about 2006,
they live on the same street, their wives and families are friends, and at the time of the events
described in this complaint, they saw each other about every other week.  They are sufficiently
close that Rosenberg came over in the middle of the night to watch E. Targum’s child when E.
Targum and his spouse needed to leave the house.
41. As a business lawyer, Rosenberg understood the law surrounding insider trading.
In fact, at the time when E. Targum and Rosenberg discussed E. Targum’s purchase of

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Frequency stock, Rosenberg asked E. Targum whether he was engaged in “insider trading” by
making an investment in Frequency stock when E. Targum’s father was working on the design of
Frequency’s second clinical trial.  E. Targum assured Rosenberg that his purchase was not
insider trading because he claimed S. Targum would not know the results of the drug’s efficacy
until that information was public.  This conversation shows that both E. Targum and Rosenberg
understood that if they or S. Targum became aware of the results of the clinical trial, or
information about the drug’s efficacy, before the public did, they would be violating the law if
they traded on that information.
42. At 9:52 am on the morning of February 6, about 6 minutes after ending an 8-
minute call with his father, and within one minute of placing the order to sell his Frequency
shares, E. Targum called his friend Rosenberg.  Their call lasted just three to four minutes and
ended at about 9:56.
43. E. Targum called Rosenberg that morning in order to tell him that he was selling
some of his Frequency shares.  At some prior date, E. Targum had told Rosenberg: about his
purchases of Frequency shares, about his father’s work for Frequency, and that he would tell
Rosenberg when or if he was going to transact again in Frequency shares.  At the time of their
call on February 6, 2023, E. Targum knew that Rosenberg also owned Frequency shares.
44. During their call on the morning of February 6, E. Targum told Rosenberg that his
father was supposed to speak with someone at Frequency.  At the time of the call, Rosenberg
knew that S. Targum had worked as a consultant to Frequency.
45. The information E. Targum conveyed to Rosenberg during their call that morning
constituted negative material nonpublic information about Frequency that caused Rosenberg to
sell his shares.

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46. When E. Targum provided negative information to Rosenberg about Frequency,
E. Targum gave Rosenberg an illicit gift of confidential, material nonpublic information that
Rosenberg could use to avoid losses by selling his Frequency shares in advance of the public
announcement of the clinical trial results.  E. Targum gave Rosenberg this information with the
expectation of providing a benefit to Rosenberg.
47. When Rosenberg received negative information about Frequency from E.
Targum, Rosenberg knew or recklessly disregarded that E. Targum had no legitimate business
purpose in providing him with that material nonpublic information and that the information must
have come from S. Targum, who had breached his duty of confidence to Frequency by sharing
that information with E. Targum.
48. At 10 am, about four minutes after ending his call with E. Targum, Rosenberg
logged onto the online system for the brokerage account in which he held his Frequency stock.
Over the next two hours, Rosenberg accessed various types of information about his accounts
and the market that were available through that online platform, and then submitted an order to
sell Frequency shares in one of his accounts at 12:06 pm.
49.   Rosenberg’s brokerage firm executed his order that day and he sold all 888
shares of Frequency that he owned in his individual brokerage account at an average price per
share of $4.217, for total proceeds of $3,744.95.
50. Two days later, on February 8, 2024, Rosenberg sold all of his remaining
Frequency shares.  That morning, he logged onto the online system for the brokerage account in
which he held his remaining Frequency shares, and at about 11 am, submitted an order to sell his
remaining Frequency shares.  The brokerage firm executed his order that day and Rosenberg sold
the remaining 4,098 shares of Frequency that he owned in his joint brokerage account at an

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average price per share of $3.75, for total proceeds of $15,367.15.
Frequency’s Clinical Trial Results Became Public and Its Stock Price Dropped by About
80%.

51. About one week after the Defendants’ sales of their Frequency shares, Frequency
announced publicly the results of the Phase 2b clinical trial of FX-322.
52. On February 13, 2023, before the markets opened, Frequency published a press
release stating that the FX-322 study failed to meet its primary endpoint such that there was no
significant difference in speech perception between patients who had been given the FX-322
drug and the placebo.  The company also announced that it would discontinue its FX-322
development program in light of these study results and would also discontinue the ongoing
clinical trial of another potential product for treating hearing loss.  Frequency stated that it would
immediately reduce its headcount, undergo a restructuring, and change its focus to work on
another product candidate to treat multiple sclerosis.
53. Frequency’s announcement of the FX-322 clinical trial results and the related
changes in its business caused Frequency’s stock price to drop by about 80% compared to the
prior day’s closing price.
54. By selling their shares on the basis of advance, nonpublic information about the
negative results of Frequency’s FX-322 clinical trial, Defendants unjustly avoided losses that
other investors in the market suffered when Frequency’s clinical trial results became public.
FIRST CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Defendants’ Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)

55. Paragraphs 1 through 54 above are re-alleged and incorporated by reference as if
fully set forth herein.
56. During the Relevant Period, the stock of Frequency was a security under Section

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3(a)(1) of the Exchange Act [15 U.S.C. §78c(a)(10)].
57. By reason of the conduct described above, Defendants, directly or indirectly, in
connection with the purchase or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, or of any facility of any national securities exchange,
intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud;
(ii) made untrue statements of material facts or omitted to state material facts necessary to make
the statements made, in the light of the circumstances under which they were made, not
misleading; and/or (iii) engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon any persons, including purchasers or sellers of the
securities.
58. Defendants’ conduct involved fraud, deceit, manipulation or deliberate or reckless
disregard of regulatory requirements and directly or indirectly resulted in substantial losses to
other persons.
59. By reason of the conduct described above, Defendants violated Exchange Act
Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R §240.10b-5] thereunder.
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that this Court:
A. Permanently restrain Defendants, their agents, servants, employees and attorneys,
and those persons in active concert or participation with them who receive actual notice of the
injunction by personal services or otherwise, and each of them, from violating Section 10(b) of
the Exchange Act [15 U.S.C. §§78i(a), 78j(b)], and Rule 10b-5 thereunder [17 C.F.R §240.10b-
5] by (i) buying or selling a security of any issuer, on the basis of material nonpublic
information, in breach of a fiduciary duty or other duty of trust or confidence that is owed

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directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer,
or to any other person who is the source of the information; or (ii) by communicating material
nonpublic information about a security or issuer, in breach of a fiduciary duty or other duty of
trust or confidence, to another person or persons for purposes of buying or selling any security;
B. Order Defendants to disgorge, with prejudgment interest, all ill-gotten losses
avoided that were obtained by reason of the unlawful conduct alleged in this Complaint, pursuant
to Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)];
C. Order Defendants each to pay an appropriate civil monetary penalty pursuant to
Section 21A of the Exchange Act [15 U.S.C. §78u-1];
D. Enter orders barring Defendants S. Targum and E. Targum from serving as
officers or directors of certain public companies, pursuant to Section 21(d)(2) of the Exchange
Act [15 U.S.C. §78u(d)(2)];
E. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
F. Grant such other further relief as the Court may deem just and proper.
JURY DEMAND
 The Commission demands a jury in this matter for all claims so triable.
DATED: August 8, 2024
                                                                        Respectfully            submitted,
                                                                        /s/            Kathleen            Burdette            Shields
                                                                        Kathleen            Burdette Shields (Mass Bar No. 637438)
                                                                        Dawn            Edick            (Mass            Bar            No.            641659)
      SECURITIES AND EXCHANGE COMMISSION
                                                                        Boston            Regional            Office
                                                                        33            Arch            Street,            24
th
 Floor
                                                                        Boston,            MA            02110
                                                                        Phone:            (617)            573-8904            (Shields            direct)

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                                                                        (617)            573-8940            (Edick            direct)
(617) 573-4590 (fax)
      [email protected] (Shields email)
      [email protected] (Edick email)

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
   Plaintiff, 
 v. 
 
STEVEN D. TARGUM, 
ELLIOT P. TARGUM, 
NICHOLAS J. ROSENBERG,  
 
   Defendants. 
 

 
 
      Civil Action No. 24-CV- 
 
 
 

 
COMPLAINT 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against defendants Steven D. Targum (“S. Targum”), Elliot P. Targum (“E. Targum”) 

and Nicholas J. Rosenberg (“Rosenberg,” and collectively, “Defendants”): 

SUMMARY 

1. This is an insider trading action.  Defendants traded in the securities of Frequency 

Therapeutics, Inc. (“Frequency”), a biotechnology company whose stock is publicly traded, in 

advance of Frequency’s public announcement on February 13, 2023 that the clinical trial for its 

lead product candidate, a drug intended to treat hearing loss, had failed to achieve its primary 

efficacy endpoint (the “Announcement”).   

2. S. Targum, a consultant to Frequency who was subject to a confidentiality 

agreement with the company, obtained material nonpublic information about the clinical trial’s 

disappointing results via emails sent on or about February 4, 2023.  On the next business day, 

February 6, 2023, S. Targum sold all of his Frequency stock, a total of 25,000 shares.   

3. S. Targum then tipped this material nonpublic information to his son, E. Targum, 

Case 1:24-cv-12043   Document 1   Filed 08/08/24   Page 1 of 15



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who sold about half of the Frequency shares that he owned, or 2,400 shares.  E. Targum’s sales 

also took place on the morning of February 6, 2023.  E. Targum placed his order to sell 

Frequency shares about six minutes after ending a phone call with S. Targum. 

4. E. Targum then tipped this material nonpublic information to his close friend 

Rosenberg.  Less than a minute after entering the order to sell about half of his Frequency shares, 

E. Targum called Rosenberg.  Shortly after that call ended, Rosenberg sold all of the Frequency 

shares he held in his individual account.  Rosenberg sold all of his remaining Frequency shares 

on February 8, 2023.  In total, over those two days, Rosenberg sold about 5,000 Frequency 

shares. 

5. On the day of the Announcement, Frequency’s shares fell 80.6%, from a closing 

price of $3.93 per share on Friday, February 10, 2023 to a closing price of $0.76 per share on 

Monday, February 13, 2023.  S. Targum, E. Targum and Rosenberg avoided losses of $86,750, 

$8,376, and $15,323 respectively, on their unlawful Frequency trades.   

6. By trading on the confidential and nonpublic information that Frequency’s 

clinical trial results were negative, S. Targum, E. Targum and Rosenberg reaped an unfair 

advantage over other investors in the public markets.  They avoided losses that other investors 

experienced when the price of Frequency’s shares fell dramatically after the Announcement. 

7. As a result of the conduct alleged herein, S. Targum, E. Targum and Rosenberg 

violated, and unless restrained and enjoined will continue to violate, Section 10(b) of the 

Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder [15 U.S.C. 

§78j(b); 17 C.F.R. §240.10b-5]. 

8. The Commission seeks permanent injunctions against S. Targum, E. Targum, and 

Rosenberg, enjoining them from engaging in the transactions, acts, practices, and courses of 

Case 1:24-cv-12043   Document 1   Filed 08/08/24   Page 2 of 15



3 
 

business of the type alleged in this Complaint, disgorgement of ill-gotten losses avoided from the 

unlawful conduct set forth in this Complaint pursuant to Section 21(d)(7) of the Exchange Act 

[15 U.S.C. §78u(d)(7)], together with prejudgment interest, civil penalties pursuant to Section 

21A of the Exchange Act [15 U.S.C. §78u-1], orders barring them from serving as officers or 

directors of certain public companies, pursuant to Section 21(d)(2) of the Exchange Act [15 

U.S.C. §78u(d)(2)], and such other relief as the Court may deem appropriate. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to Sections 21(d)(1), 21(e), 

and 27 of the Exchange Act [15 U.S.C §§78u(d)(1), 78u(e) and 78aa].   

10. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15 

U.S.C §78aa].  Defendants reside in the District of Massachusetts.  Also, certain of the acts, 

practices, transactions and courses of business constituting the violations alleged in this 

Complaint occurred within the District of Massachusetts, and were effected, directly, or 

indirectly, by making use of the means or instrumentalities of transportations or communication 

in interstate commerce, or the mails, including the internet and the telephone. 

DEFENDANTS 

11. Steven Targum, age 75, resides in Boston, Massachusetts.  He was engaged by 

Frequency as a consultant on its clinical trial design from February 2021 until approximately 

February 2023.  S. Targum has served as a consultant, Chief Medical Officer, Chief Medical 

Advisor/Medical Director, or Scientific Director at numerous public and private pharmaceutical 

and biotechnology companies and medical institutions.  He has held medical licenses in several 

states, but all are currently inactive. 

12. Elliot Targum, age 46, resides in Arlington, Massachusetts and is the son of S. 

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Targum.  E. Targum is currently the Chief Operating Officer of a privately-held insurance 

brokerage firm. 

13. Nicholas Rosenberg, age 49, resides in Arlington, Massachusetts.  Rosenberg is a 

licensed attorney who practices as a partner in a private law firm.  Rosenberg and his spouse are 

close friends and neighbors of E. Targum and his spouse.   

RELATED ENTITY 

14. Frequency Therapeutics, Inc. was a Delaware corporation with a principal place 

of business in Lexington, Massachusetts before its merger with Korro Bio, Inc. on November 3, 

2023.  During the relevant period, Frequency’s securities were registered pursuant to Section 

12(b) of the Exchange Act and traded on the Nasdaq Global Select Market under the ticker 

symbol FREQ.  Frequency was a biotechnology company that focused on developing 

therapeutics that would restore various human biological functions through the activation of 

progenitor cells.   

FACTUAL ALLEGATIONS 

S. Targum’s Relationship with Frequency 

15. In 2022 and early 2023, Frequency’s lead product candidate was a drug known as 

FX-322, which was developed to treat the most prevalent type of hearing loss by treating the loss 

of hair cells in the ear.     

16. In June 2021, Frequency announced final results from the Phase 2a clinical trial of 

FX-322.  The trial failed to establish that the drug produced hearing improvements in the patients 

studied as compared to the placebo.  Frequency attributed the results of this study, in part, to 

uncontrolled bias and a flawed study design because the placebo group showed unexpected 

positive results in their hearing scores.  Frequency decided to conduct a Phase 2b clinical trial of 

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FX-322 with a study design that would eliminate the placebo-related issues that it believed 

negatively impacted the results of this Phase 2a trial. 

17. In February 2021, Frequency hired S. Targum to consult on its clinical trials, 

including the Phase 2b clinical trial of FX-322.  S. Targum worked in the field of clinical trial 

design and had specific experience in the area of eliminating problems in clinical trials that arise 

from the placebo effect.  The term of the Consulting Agreement was the later of (i) one year, or 

(ii) until completion of the last Project Assignment, which was defined as “supporting Frequency 

as a clinical trial consultant in data analysis and trial design issues.”  The Consulting Agreement 

was still in force in February 2023. 

18. By signing the Consulting Agreement, S. Targum acknowledged that in the 

course of his performance as a Consultant, (i) he may receive confidential information, including 

clinical data and related derivatives, enhancements, or improvements of clinical data, and (ii) that 

he was obligated not to use or disclose such confidential information.  He also acknowledged 

that he was “aware that . . . U.S. and state securities laws and regulations prohibit any person or 

entity who or that has received material, nonpublic information from purchasing or selling 

securities of an issuer or from communicating such information to any other person or entity 

under circumstances in which it is reasonably foreseeable that such person or entity is likely to 

purchase or sell such securities.” 

19. Further, when S. Targum was provided access to the nonpublic clinical trial data 

for the Phase 2a clinical trial of FX-322, Frequency’s General Counsel informed him in an email 

message of his legal obligations to protect that “extremely sensitive and confidential” data.  

Targum responded in email that he understood the General Counsel’s warnings that the clinical 

trial data was “material, non-public information under Frequency’s Insider Trading Compliance 

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Policy and U.S. securities laws” and that the consequences “would be severe” were someone “to 

trade or cause others to trade on the basis of this information” before its public release. 

20. Frequency began dosing patients in the Phase 2b study in October 2021, and 

publicly announced, by early November 2022, that it expected to release data from the study in 

the first quarter of 2023. 

S. Targum Learned that the Phase 2b Trial Results Were “Not What People Had Hoped” 
and Sold All of His Frequency Shares. 
 

21. On Saturday, February 4, 2023 at about 4 pm, the CEO of Frequency emailed S. 

Targum, copying Frequency’s General Counsel and stating “[t]he team and I would be 

appreciative if you could take a few minutes tomorrow (I know. . .) to connect.”  The CEO’s 

email did not otherwise indicate the reason for wanting to speak with S. Targum over the 

weekend on a Sunday.   

22. About two hours later, Frequency’s Chief Medical Officer emailed S. Targum 

with the subject line of the email reading “Trial results.”  The body of the email said, in pertinent 

part, “The results of the Phase 2b hearing study have come in.  Not what people had hoped I 

think.  Might you have any time on Monday to join in the discussions?  Afternoon?” 

23. S. Targum knew that the information in the email message from Frequency’s 

Chief Medical Officer about Frequency’s negative clinical trial results was nonpublic and highly 

confidential.   

24. S. Targum responded to the CEO’s email at about 6 pm on February 5 and 

indicated he was free on Monday to speak.  S. Targum and the CEO agreed to speak at 9 am on  

Monday, February 6. 

25. Shortly after 9 am on February 6, S. Targum received an email from Frequency’s 

CEO stating that their planned 9 am call would need to be rescheduled.  At 9:10 am, S. Targum 

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responded “ok.” 

26. About one hour after his February 6 email exchange with Frequency’s CEO, S. 

Targum called his financial adviser, C.S., and directed C.S. to sell all of S. Targum’s Frequency 

shares.  During that call, C.S. reminded S. Targum that he could not trade if he had material 

nonpublic information about Frequency.  When interviewed, C.S. informed the Commission’s 

staff that he got the impression from his call with S. Targum that S. Targum had not 

communicated with Frequency recently. 

27. C.S. executed S. Targum’s order to sell all of his Frequency shares and 

accordingly, S. Targum sold all 25,000 shares of Frequency he owned at a price per share of 

$4.23, for total proceeds of $105,750.  

28. As a Frequency consultant, S. Targum owed Frequency a duty to protect the 

confidentiality of the highly sensitive and nonpublic information it gave to him about the results 

of the Phase 2b clinical trial of FX-322.  S. Targum breached that duty both by trading on that 

information to sell Frequency shares in his own accounts and, as described below, by providing 

that material nonpublic information to his son E. Targum with the expectation of providing him 

with a financial benefit. 

S. Targum Tipped E. Targum About Frequency’s Negative Trial Results and E. Targum 
Sold Half of His Frequency Shares. 
 

29. On February 6, 2023, S. Targum knew that E. Targum owned shares of 

Frequency.  S. Targum was the person who had introduced E. Targum to Frequency stock in the 

first place at or near the time he began working as a Frequency consultant.  E. Targum purchased 

Frequency shares because he thought that S. Targum’s work on Frequency’s clinical trial design 

would help the drug succeed. 

30. On February 6, about one minute after responding to the Frequency CEO’s email 

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cancelling their meeting, S. Targum called E. Targum and they spoke for 8 minutes and 40 

seconds.  That call ended at about 9:20 am. 

31. About one minute after ending the call with his father, at 9:21 am, E. Targum 

logged onto the online system for the brokerage account in which he held his Frequency stock.  

Also, at 9:21 am, E. Targum placed a call to his friend Rosenberg, which call lasted 23 seconds.  

During an investigation into the Defendants’ trading activities, the Commission subpoenaed E. 

Targum to give testimony under oath.  During his testimony on August 31, 2023, E. Targum 

testified that he believes that he did not speak to Rosenberg during the 9:21 am call, but rather 

left a message. 

32. E. Targum remained logged into his brokerage account’s online platform for 

about 37 minutes that morning, until 9:58 am. 

33. E. Targum tried calling his father at 9:25 am but they did not connect by phone.  

They then exchanged a text message at 9:25.  S. Targum then called E. Targum at 9:38 am and 

they spoke for close to 8 minutes, until almost 9:46 am. 

34. During one of the calls between S. Targum and E. Targum on the morning of 

February 6, S. Targum and E. Targum discussed the fact that the CEO of Frequency had 

scheduled a call with S. Targum for that morning, and then cancelled the call. 

35. During one of the calls between S. Targum and E. Targum on the morning of 

February 6, S. Targum conveyed, in substance, to E. Targum the material, nonpublic information 

that the results of Frequency’s Phase 2b clinical trial for FX-322 were negative.   

36. When S. Targum provided information to E. Targum about the negative results of 

Frequency’s clinical trial, S. Targum gave E. Targum an illicit gift of confidential, material 

nonpublic information that E. Targum could use to avoid losses by selling his Frequency shares 

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in advance of the public announcement of the clinical trial results.  S. Targum knew or recklessly 

disregarded that E. Targum would use the information he provided to sell Frequency shares. 

37. When E. Targum received information about Frequency’s negative clinical trial 

results from his father, E. Targum knew or recklessly disregarded that his father had no 

legitimate business purpose in providing him with that material nonpublic information and that 

S. Targum was breaching his duty of confidence to Frequency by sharing that information with 

him. 

38. After hanging up from the phone call with his father, E. Targum made several 

changes to the order he had entered on his online brokerage platform.  At 9:52 am, about 6 

minutes of ending the call with his father, E. Targum submitted the order to his brokerage firm to 

sell about half of the Frequency shares he owned. 

39. E. Targum’s brokerage firm executed his order that day and E. Targum sold 2,400 

shares of Frequency at a price per share of $4.25, for total proceeds of $10,200.  E. Targum 

retained 2,365 shares of Frequency stock and did not sell them in February 2023. 

E. Targum Tipped Rosenberg About Frequency’s Negative Trial Results and Rosenberg 
Sold All of His Frequency Shares. 
 

40. During his testimony under oath to the Commission on August 31, 2023, E. 

Targum described Rosenberg as a “close” friend.  They have known each other since about 2006, 

they live on the same street, their wives and families are friends, and at the time of the events 

described in this complaint, they saw each other about every other week.  They are sufficiently 

close that Rosenberg came over in the middle of the night to watch E. Targum’s child when E. 

Targum and his spouse needed to leave the house. 

41. As a business lawyer, Rosenberg understood the law surrounding insider trading.  

In fact, at the time when E. Targum and Rosenberg discussed E. Targum’s purchase of 

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Frequency stock, Rosenberg asked E. Targum whether he was engaged in “insider trading” by 

making an investment in Frequency stock when E. Targum’s father was working on the design of 

Frequency’s second clinical trial.  E. Targum assured Rosenberg that his purchase was not 

insider trading because he claimed S. Targum would not know the results of the drug’s efficacy 

until that information was public.  This conversation shows that both E. Targum and Rosenberg 

understood that if they or S. Targum became aware of the results of the clinical trial, or 

information about the drug’s efficacy, before the public did, they would be violating the law if 

they traded on that information. 

42. At 9:52 am on the morning of February 6, about 6 minutes after ending an 8-

minute call with his father, and within one minute of placing the order to sell his Frequency 

shares, E. Targum called his friend Rosenberg.  Their call lasted just three to four minutes and 

ended at about 9:56. 

43. E. Targum called Rosenberg that morning in order to tell him that he was selling 

some of his Frequency shares.  At some prior date, E. Targum had told Rosenberg: about his 

purchases of Frequency shares, about his father’s work for Frequency, and that he would tell 

Rosenberg when or if he was going to transact again in Frequency shares.  At the time of their 

call on February 6, 2023, E. Targum knew that Rosenberg also owned Frequency shares. 

44. During their call on the morning of February 6, E. Targum told Rosenberg that his 

father was supposed to speak with someone at Frequency.  At the time of the call, Rosenberg 

knew that S. Targum had worked as a consultant to Frequency. 

45. The information E. Targum conveyed to Rosenberg during their call that morning 

constituted negative material nonpublic information about Frequency that caused Rosenberg to 

sell his shares.   

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46. When E. Targum provided negative information to Rosenberg about Frequency, 

E. Targum gave Rosenberg an illicit gift of confidential, material nonpublic information that 

Rosenberg could use to avoid losses by selling his Frequency shares in advance of the public 

announcement of the clinical trial results.  E. Targum gave Rosenberg this information with the 

expectation of providing a benefit to Rosenberg. 

47. When Rosenberg received negative information about Frequency from E. 

Targum, Rosenberg knew or recklessly disregarded that E. Targum had no legitimate business 

purpose in providing him with that material nonpublic information and that the information must 

have come from S. Targum, who had breached his duty of confidence to Frequency by sharing 

that information with E. Targum. 

48. At 10 am, about four minutes after ending his call with E. Targum, Rosenberg 

logged onto the online system for the brokerage account in which he held his Frequency stock.  

Over the next two hours, Rosenberg accessed various types of information about his accounts 

and the market that were available through that online platform, and then submitted an order to 

sell Frequency shares in one of his accounts at 12:06 pm. 

49.   Rosenberg’s brokerage firm executed his order that day and he sold all 888 

shares of Frequency that he owned in his individual brokerage account at an average price per 

share of $4.217, for total proceeds of $3,744.95. 

50. Two days later, on February 8, 2024, Rosenberg sold all of his remaining 

Frequency shares.  That morning, he logged onto the online system for the brokerage account in 

which he held his remaining Frequency shares, and at about 11 am, submitted an order to sell his 

remaining Frequency shares.  The brokerage firm executed his order that day and Rosenberg sold 

the remaining 4,098 shares of Frequency that he owned in his joint brokerage account at an 

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average price per share of $3.75, for total proceeds of $15,367.15. 

Frequency’s Clinical Trial Results Became Public and Its Stock Price Dropped by About 
80%. 
 

51. About one week after the Defendants’ sales of their Frequency shares, Frequency 

announced publicly the results of the Phase 2b clinical trial of FX-322. 

52. On February 13, 2023, before the markets opened, Frequency published a press 

release stating that the FX-322 study failed to meet its primary endpoint such that there was no 

significant difference in speech perception between patients who had been given the FX-322 

drug and the placebo.  The company also announced that it would discontinue its FX-322 

development program in light of these study results and would also discontinue the ongoing 

clinical trial of another potential product for treating hearing loss.  Frequency stated that it would 

immediately reduce its headcount, undergo a restructuring, and change its focus to work on 

another product candidate to treat multiple sclerosis. 

53. Frequency’s announcement of the FX-322 clinical trial results and the related 

changes in its business caused Frequency’s stock price to drop by about 80% compared to the 

prior day’s closing price. 

54. By selling their shares on the basis of advance, nonpublic information about the 

negative results of Frequency’s FX-322 clinical trial, Defendants unjustly avoided losses that 

other investors in the market suffered when Frequency’s clinical trial results became public. 

FIRST CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES  

(Defendants’ Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 
 

55. Paragraphs 1 through 54 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

56. During the Relevant Period, the stock of Frequency was a security under Section 

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3(a)(1) of the Exchange Act [15 U.S.C. §78c(a)(10)]. 

57. By reason of the conduct described above, Defendants, directly or indirectly, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud; 

(ii) made untrue statements of material facts or omitted to state material facts necessary to make 

the statements made, in the light of the circumstances under which they were made, not 

misleading; and/or (iii) engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon any persons, including purchasers or sellers of the 

securities. 

58. Defendants’ conduct involved fraud, deceit, manipulation or deliberate or reckless 

disregard of regulatory requirements and directly or indirectly resulted in substantial losses to 

other persons. 

59. By reason of the conduct described above, Defendants violated Exchange Act 

Section 10(b) [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R §240.10b-5] thereunder. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that this Court: 

A. Permanently restrain Defendants, their agents, servants, employees and attorneys, 

and those persons in active concert or participation with them who receive actual notice of the 

injunction by personal services or otherwise, and each of them, from violating Section 10(b) of 

the Exchange Act [15 U.S.C. §§78i(a), 78j(b)], and Rule 10b-5 thereunder [17 C.F.R §240.10b-

5] by (i) buying or selling a security of any issuer, on the basis of material nonpublic 

information, in breach of a fiduciary duty or other duty of trust or confidence that is owed 

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directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer, 

or to any other person who is the source of the information; or (ii) by communicating material 

nonpublic information about a security or issuer, in breach of a fiduciary duty or other duty of 

trust or confidence, to another person or persons for purposes of buying or selling any security; 

B. Order Defendants to disgorge, with prejudgment interest, all ill-gotten losses 

avoided that were obtained by reason of the unlawful conduct alleged in this Complaint, pursuant 

to Section 21(d)(7) of the Exchange Act [15 U.S.C. §78u(d)(7)]; 

C. Order Defendants each to pay an appropriate civil monetary penalty pursuant to 

Section 21A of the Exchange Act [15 U.S.C. §78u-1]; 

D. Enter orders barring Defendants S. Targum and E. Targum from serving as 

officers or directors of certain public companies, pursuant to Section 21(d)(2) of the Exchange 

Act [15 U.S.C. §78u(d)(2)]; 

E. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and  

F. Grant such other further relief as the Court may deem just and proper. 

JURY DEMAND 

 The Commission demands a jury in this matter for all claims so triable. 

DATED: August 8, 2024 

      Respectfully submitted, 

      /s/ Kathleen Burdette Shields    
      Kathleen Burdette Shields (Mass Bar No. 637438) 
      Dawn Edick (Mass Bar No. 641659) 
      SECURITIES AND EXCHANGE COMMISSION 
      Boston Regional Office 
      33 Arch Street, 24th Floor 
      Boston, MA 02110 
      Phone: (617) 573-8904 (Shields direct) 

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      (617) 573-8940 (Edick direct) 
(617) 573-4590 (fax) 

      [email protected] (Shields email) 
      [email protected] (Edick email) 

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