San Francisco man gets prison for insider deal
A San Francisco man was sentenced Thursday to three months in federal prison for using insider information five years ago to profit off The Walt Disney Co.'s $4 billion purchase of Marvel Entertainment.
Toby G. Scammell was also ordered to pay more than $120,000 to brokers who sold him stock options, according to Assistant U.S. Attorney Stephen Cazares. Scammell also owes the Securities and Exchange Commission $801,000 in penalties and interest in a separate civil settlement.
Scammell, 29, was tipped off to the acquisition by a girlfriend who worked as a Disney corporate strategy employee. He made $192,000 from the deal.
The former girlfriend, who wasn't charged in the scheme, told Scammell only that Disney planned to acquire a company "people would recognize right away." Scammell knew from his consulting work that Disney had wanted to acquire the comic book publisher famous for "Spider-Man" and "X-Men."
He bought call options in Marvel stock for around $5,500 and sold them after the Aug. 31, 2009, deal was announced and the stock price rose 25 percent.
He had purchased half the options through his brother's account but didn't tell his brother or girlfriend. He transferred $100,000 of the profits from his brother's account to conceal the trading.
Scammell said in court Thursday that the deal had put a huge strain on his relationship with his brother. He refused to comment after the sentencing.
Scammell pleaded guilty in April to securities fraud through insider trading.
He is to begin serving his sentence Sept. 22 and will be confined to his home for six months after his release.