Securities and Exchange CommissionLOS 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 Thursday.

U.S. District Judge S. James Otero ordered Scammell to begin serving  his sentence on Sept. 22.

In addition, Judge Otero ordered him to pay restitution in the amount of $122,494.05 to victim broker-dealers who sold the options to Scammell.  He was also ordered to make payments upon his release from prison towards a related Securities and Exchange Commission judgment  totaling $800,985.

Scammell pleaded guilty in April 2014 to one count of securities fraud through insider trading.

According to a plea agreement filed in federal court, Scammell learned that Disney planned to acquire another company “that people would recognize right away” from his then-girlfriend, who was an intern at Disney in the summer of 2009 and who worked on the deal to acquire Marvel, officials said.

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 stated 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, officials said.

By Raul

Raul Hernandez is a former journalist. He has worked as a newspaper reporter for more than 30 years at the El Paso Herald-Post, El Paso Times, Press Enterprise in Riverside, California and the Ventura County Star in California. He was a court reporter for more than 20 years.