November 5, 2024 The Best Source of News, Culture, Lifestyle for Culver City, Mar Vista, Del Rey, Palms and West Los Angeles

Prosecutors recommend jail time for man who illegally made money from confidential information regarding Walt Disney Co. and Marvel Entertainment

 

The confidential information pertained to Walt Disney Co.'s acquisition of Marvel Entertainment. (Thinkstock)
The confidential information pertained to Walt Disney Co.’s acquisition of Marvel Entertainment. (Thinkstock)

Prosecutors are recommending that a federal judge today sentence a 29-year-old man to six 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 confidential 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 agreement.

Prosecutors also recommend that U.S. District Judge S. James Otero order Scammell to serve six months in home detention following prison and pay restitution of $192,000 — a payment Scammell has already made, according to court papers.

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 non-public 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, court papers show.

After the announcement, Scammell placed orders to sell all his Marvel options, making a profit of more than $192,000 on his initial $5,465 investment, prosecutors said.

Scammell, a San Francisco resident, pleaded guilty in April to securities fraud.

In a parallel case, Scammell was ordered in March to pay nearly $801,000 to settle an insider trading suit brought by the U.S. Securities and Exchange Commission in 2011. He was also permanently barred from working in the securities industry.

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