(Reuters) - A Massachusetts lawyer was sentenced to eight months of home confinement on Monday, avoiding prison for trading on inside information about American Superconductor Corp that prosecutors say a fellow golfer learned from an executive.
Douglas Parigian, 56, was sentenced by U.S. District Judge Denise Casper in Boston after pleading guilty in May to conspiracy and securities fraud charges, said a spokeswoman for U.S. Attorney Carmen Ortiz.
His plea came after Eric McPhail, a marble salesman who was a golfing buddy of Parigian’s, was found guilty by a federal jury on conspiracy and securities fraud charges in connection with the insider trading scheme.
Prosecutors had sought 24 months in prison for Parigian, while his lawyer pushed for no prison time. Allison Koury, his lawyer, said she was “very pleased” with the sentence.
Prosecutors said McPhail learned secret information about American Superconductor from an unnamed senior executive who, like him, belonged to the Oakley Country Club in Watertown, Massachusetts.
Despite hearing the information in confidence, McPhail starting in 2009 began sharing with his friends the inside information about the company’s business activities and earnings announcements, prosecutors said.
Over a two-year period, McPhail’s friends made over $500,000 by illegally trading on the tips, prosecutors said. Parigian alone made more than $267,000, prosecutors have said.
The trial and Parigian’s plea came after Casper rejected a bid to dismiss the case in light of a December ruling by the 2nd U.S. Circuit Court of Appeals in New York that curtailed authorities’ ability to pursue insider trading.
While the decision, which reversed the convictions of hedge fund managers Todd Newman and Anthony Chiasson, only applied to judges in New York, Vermont and Connecticut, defendants in other states have sought to take advantage of it in their cases.
Parigian’s plea deal allows him to appeal Casper’s decision. The U.S. Justice Department has meanwhile petitioned the Supreme Court to review the 2nd Circuit’s ruling.
The case is U.S. v. McPhail, U.S. District Court, District of Massachusetts, No. 14-cr-10201.
Reporting by Nate Raymond in New York; Editing by G Crosse and James Dalgleish