Brooklyn, NY – Judge Sentenced 4 to Prison for Insider Trading

A Brooklyn judge has sentenced the former corporate executive of a pharmaceutical company, his two sons and a former accountant for an insider trading scheme worth more than $2 million.
The four men pleaded guilty to securities fraud and were sentenced to fines and prison sentences ranging from two months to five years.
In one scheme, Zvi Rosenthal, 62, a former vice president at Taro Pharmaceutical Industries, Ltd., admitted that he gave his son Amir, then a 26-year-old corporate lawyer at Thacher Proffitt & Wood, confidential information about a new product. Amir bought Taro options contracts and netted more than $100,000 profits after the FDA approved the product.

The defendant Zvi Rosenthal also learned that Taro’s second-quarter sales figures would be far worse than expected. He told Amir, who executed securities transactions designed to profit when the stock price fell after the quarterly earnings became public. Amir also shared the information with another (unindicted) family member and with his friend David Heyman, 30, an accountant. They also traded on the confidential information.

To thank him for the tip, Heyman bought Zvi a plasma television worth $6,000, and the unnamed trader gave him a $66,000 kickback.

Federal district Judge John Gleeson sentenced Zvi Rosenthal to five years in prison and a $100,000 fine. His son Amir received a $75,000 fine and 33 months in prison. David Heyman received a 15-month sentence, and Ayal Rosenthal was sentenced to two months in prison. [Daily Eagle]