Former Los Angeles King co-owner Jeffrey P. Sudikoff, sentenced to a year in federal prison and fined $3 million last year for insider trading in 1994, stands to make millions of dollars if the Santa Monica company he co-founded in 1995 successfully completes an $86-million first-time stock offering as planned next month.
The 44-year-old Sudikoff is a minority shareholder of InterPacket Networks Inc., a satellite-based broadband Internet network focused on international markets, which filed Feb. 18 to sell an initial public offering through underwriters Chase H&Q, Lehman Bros. and CIBC World Markets.
In December, Sudikoff agreed to pay more than $850,000 to settle a civil action brought against him by the Securities and Exchange Commission stemming from his actions as chief executive of Culver City-based IDB Communications Group, a global satellite network that was purchased in 1994 by what is now MCI WorldCom. IDB is not related to InterPacket Networks.
Although he is a shareholder, Sudikoff has resigned from all operational roles and has set up a proxy agreement, so he is not considered a voting shareholder, according to SEC filings by InterPacket. The company has nearly 500 customers, mostly Internet service providers.
Sudikoff did not return calls seeking comment on the IPO. Company officials declined to comment on the IPO, citing the so-called quiet period imposed by the SEC before and after any public stock offering.
At the time the plea agreement was reached, Los Angeles federal Judge Dean D. Pregerson ordered Sudikoff to surrender to the U.S. Bureau of Prisons by Jan. 28, and according to SEC filings, Sudikoff is serving his time in a halfway house.
Without admitting or denying any wrongdoing in the SEC case, which alleged securities fraud, Sudikoff also agreed to be barred from serving as a corporate officer or director of a publicly traded company for 12 years.
"They took care of him. He signed his life away with that proxy," said Tom Taulli, an analyst with Internet.com in Westport, Conn. "He has no say, he has no day-to-day involvement, and he's not allowed to go to board meetings. There's a wall up."
Still, a call Thursday to InterPacket's Santa Monica offices asking for Sudikoff was put directly to his secretary, who said Sudikoff was unavailable.
