Aug 7 A 29-year-old San Francisco man was sentenced to three months in federal prison on Thursday after he pleaded guilty to insider trading ahead of news that Marvel Entertainment Inc would be bought by Walt Disney Co.
Toby Scammell, a former associate at California investment firm, Madrone Capital Partners, admitted in April to illegally making $192,000 in August 2009 by purchasing stock options to buy Marvel stock just before Marvel's acquisition by Disney, where his girlfriend was working.
In addition to the prison sentence, U.S. District Judge James Otero in Los Angeles ordered Scammell to pay restitution of about $122,494 to the victim broker-dealers.
Scammell earlier had been ordered to pay civil penalties and interest of $800,985 in a civil action filed by the Securities and Exchange Commission.
Scammell admitted that he had learned that Disney planned to acquire a company "that people would recognize right away" from his then-girlfriend, who was working as an extern at Disney in the summer of 2009.
Later, Scammell learned from a supervisor at his then-employer that Disney had earlier been interested in acquiring Marvel. Scammell used the information to acquire 659 call options to purchase Marvel stock for $5,465, according to prosecutors.
Immediately after Disney's public announcement of the deal, Scammell sold his options, realizing more than $192,000 in profits.
Scammell's attorneys could not immediately be reached for comment.
The case is U.S. v. Scammell, U.S. District Court, Central District of California, No. 13-cr-00733. (Reporting by Kanika Sikka in Bangalore; Editing by Leslie Adler)