Former Fannie Mae Official Sentenced To Federal Prison For Soliciting Kickbacks From Broker Who Sold Foreclosed Properties
LOS ANGELES – A San Francisco man was sentenced to three months in federal prison, followed by six months of home confinement with electronic monitoring, for his involvement in insider trading by purchasing Marvel Entertainment, Inc. stock options immediately prior to its acquisition by The Walt Disney Company in August 2009.
Toby G. Scammell, 29, was sentenced this morning by United States District Judge S. James Otero. In addition to the prison term, which Scammell was ordered to begin serving on September 22, 2014, Judge Otero ordered him to pay restitution in the amount of $122,494.05 to victim broker-dealers who sold the options to Scammell, and ordered him to make payments upon his release from prison toward a judgment to disgorge his trading profits and pay civil penalties and interest totaling $800,985 in a related civil action filed by the Securities and Exchange Commission.
Scammell pleaded guilty in April 2014 to one count of securities fraud through insider trading.
According to court documents, Scammell learned that Disney planned to acquire another company “that people would recognize right away” from his then-girlfriend, who was an extern at Disney in the Summer of 2009 and who worked on the deal to acquire Marvel. Scammell later learned from a supervisor at his then-employer -- which had periodically provided corporate consulting services to Disney and had confidentiality obligations to Disney -- that Disney had previously been interested in acquiring Marvel. Scammell admitted that he learned the planned acquisition by Disney was estimated to close by Labor Day 2009, based on his observations of his girlfriend’s work schedule at Disney and their own travel plans at the time.
Scammell used the information that he learned from his girlfriend to acquire 659 call options to purchase Marvel stock for $5,465. He purchased more than half of the options in his brother's account. Scammell did not tell his girlfriend or his brother about the purchases of the Marvel call options.
Marvel’s stock rose approximately 25 percent after the deal with Disney was announced on August 31, 2009. After the acquisition was publicly disclosed by Disney, Scammell immediately sold his options, realizing more than $192,000 in profits. Scammell transferred $100,000 of the profits out of his brother's account to conceal the trading and profits from his brother.
This case was investigated by the Federal Bureau of Investigation, which received assistance from the Securities and Exchange Commission.
Release No. 14-104