| April 21
April 21 A former associate at a California
investment firm pleaded guilty to securities fraud Monday,
admitting to illegally making $192,000 trading ahead of news
Marvel Entertainment would be bought by Walt Disney Co,
where his girlfriend was working.
Toby Scammell, a San Francisco resident who previously
worked at Madrone Capital Partners, pleaded guilty to a single
securities fraud count at a hearing in Los Angeles federal
court, more than six months after he was criminally charged.
The indictment followed an earlier civil lawsuit launched in
2011, by the U.S. Securities and Exchange Commission, which had
last month reached a $800,985 settlement with Scammell.
As part of a plea agreement, Scammell, 29, admitted he
learned Disney planned to buy a company people "would recognize
right away" from his then-girlfriend, who was working as an
extern at the company in summer 2009.
Scammell later learned from a supervisor at a corporate
consulting company he worked at that Disney had previously been
interested in buying Marvel, Scammell admitted as part of the
agreement. While not named in the plea agreement, court records
show Scammell had worked at Bain & Co.
Based on this information, Scammell bought call options in
August 2009 to buy Marvel stock for $5,465, prosecutors said. In
the wake of the deal's announcement on Aug. 31, 2009, Scammell
sold his options, netting $192,000 in profits, according to
The trades took place the same month records show Scammell
joined Madrone, an investment firm in Menlo Park, California,
affiliated with Robson Walton, the chairman of Wal-Mart Stores
Inc, and other members of the Walton family.
A court filing by Scammell's lawyers earlier this month said
Madrone fired Scammell in February 2010. A call to Madrone
seeking comment was not immediately returned.
Scammell faces a maximum of 25 years in prison, though under
the plea agreement, prosecutors have agreed to recommend a term
of no more than six months in prison followed by six months of
Sentencing before U.S. District Judge James Otero is
scheduled for July 28. A lawyer for Scammell did not respond to
requests for comment.
The case is U.S. v. Scammell, U.S. District Court, Central
District of California, No. 13-cr-00733.
(Reporting by Nate Raymond in New York; Editing by Bernard Prr)