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Monday, Dec 4, 2023

Prison Time for Disney Inside Trader

A San Francisco man has been sentenced to three months in prison for insider trading connected to Walt Disney Co.’s acquisition of Marvel Entertainment Inc., whose comic-book characters have provided content for a string of blockbusters. Toby G. Scammell pleaded guilty in April to one count of securities fraud stemming from his purchase in August 2009 of more than 600 call options of Marvel stock just prior to the acquisition by Burbank-based Disney. After the acquisition became public, Scammell sold the options, which cost him $5,465, for profits of $192,000, according to the U.S. Attorney’s Office for the Central District of California. Scammell learned that Disney was planning a major acquisition from a then-girlfriend who was interning for Disney that summer. Through a supervisor at his then-employer he also found out that Disney had a strong interest in Marvel, the U.S. Attorney’s office said. The employer at the time was performing contract work for Disney. Scammell was charged in August 2011 with a civil violation of securities fraud by the Securities & Exchange Commission and later ordered to pay $800,985. He was indicted by a federal grand jury in October 2013. U.S. District Court Judge S. James Otero ordered Scammell on Thursday to serve three months in federal prison and pay $122,000 in restitution. The government was alerted to Scammell’s scheme because he had never invested in Marvel prior to August 2009 and when he bought the Marvel call options he was not purchasing any other securities, according to the SEC complaint. “Scammell’s only prior purchase of call options involved the purchase of Google long-term call options that did not expire for more than one year and which he sold at a loss of more than 99 percent,” the complaint stated. Hit films produced by Disney based on Marvel characters include the “Iron Man” series and “Marvel’s The Avengers.”

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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