A 29-year-old man was sentenced Thursday to three months behind bars for illegally making more than $192,000 from confidential information tied to the Walt Disney Co.'s acquisition of Marvel Entertainment.
Toby G. Scammell learned details of the planned $4 billion transaction from his former girlfriend, who had landed a six-month externship in Disney's corporate strategy department in Burbank in the months leading up to the 2009 deal, according to his plea deal.
U.S. District Judge S. James Otero ordered Scammell to complete four years of supervised release, including six months in home detention, following his release from prison.
The judge also ordered Scammell to pay $1,500 a month during his term of supervised release toward $800,000 he was previously ordered to pay to the U.S. Securities and Exchange Commission to settle a parallel civil case.
“In these types of cases, general deterrence is an important factor,” Assistant U.S. Attorney Stephen A. Cazares said outside court. “For that reason, custody is important in this case. Insider trading is epidemic today.”
Scammell has already paid $192,000 to the SEC, the prosecutor said.
The girlfriend — who was not charged — never revealed that Marvel was an acquisition target, but Scammell was able to piece together details of the deal from overheard conversations, access to her BlackBerry and conjecture, prosecutors said.
Scammell admitted acquiring call options in Marvel, based on nonpublic information that Disney was going to offer about $50 a share to buy the iconic comic-book publisher. The options entitled him to purchase the company's stock in the future at prices ranging from $40 to $45.
The day Disney publicly announced its planned purchase, Marvel's stock increased 25 percent, to $48.37.
After the announcement, Scammell placed orders to sell all his Marvel options, earning a profit of more than $192,000 on his initial $5,465 investment.
Scammell, a San Francisco resident, pleaded guilty in April to securities fraud. As part of the judge's order in the SEC case, he was permanently barred from working in the securities industry.