NEW YORK — A 32-year-old Laguna Hills salesman has agreed to plead guilty to counts of conspiracy and perjury and pay $62,066 to settle charges that he illegally profited from stock information gleaned from advance copies of Business Week magazine.
Shayne A. Walters, a former salesman at the Irvine office of R. R. Donnelley & Sons, a major printing firm, has signed an agreement with the Securities and Exchange Commission to settle civil charges against him, SEC officials said Thursday. The U.S. attorney in Manhattan on Thursday also charged him with the two criminal counts, to which he is expected to plead guilty.
The pleas will make Walters' case the third to be concluded in the Business Week insider trading scandal that came to light one year ago this month. Authorities have charged that a variety of people used advanced information from the magazine's "Inside Wall Street" column to purchase stocks, on the expectation that distribution of the magazine would raise the stocks' price.
According to the SEC, Walters worked from 1983 until last April as a salesman for Donnelley, which printed copies of Business Week at its Torrance plant. Between October, 1987, and May, 1988, Walters bought 26,500 shares in 13 companies mentioned in the magazine, relying on advance information.
Net Profits of $31,033
He earned a net profit of about $1,000 from the trades, according to his attorney, sources said. Among the shares he purchased were those of Tri-Star Pictures, Mattel, Playboy Entertainment and Zenith Laboratories, the SEC complaint shows.
He also sold the information to his stockbroker, and at least one other person, for a profit of about $30,000. Authorities did not identify the broker, but sources said the broker worked for an office of Smith Barney, Harris Upham & Co.
Under the SEC agreement, Walters will give up his net profits of $31,033 and will pay a penalty equal to the same amount.
The conspiracy and perjury counts each carry penalties of up to five years in jail and a fine of up to $250,000. Walters, who now holds another sales job, waived indictment and was released Thursday without bail.
Walters is "just a nice kid who made a mistake, for which he's going to pay heavily," said his attorney, Theodore A. Cohen.
The Business Week scandal has already brought guilty pleas from a former Merrill Lynch stockbroker, William Dillon, and from Business Week's former radio broadcaster, Rudy Ruderman. Authorities said the Walters case was not connected to any other of the Business Week cases that have come to light within the past year.