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Exec Sentenced for Lying in Adaptec Probe

March 23, 2004|From Bloomberg News

Michael Ofstedahl, a former Adaptec Inc. vice president, was sentenced Monday to five years' probation and six months of electronic monitoring for obstructing a federal investigation of trades in the computer-networking company.

The Securities and Exchange Commission accused Ofstedahl of giving his dentist inside information about an upcoming Adaptec earnings release in exchange for a share of any proceeds. The dentist tipped another man, who also traded the shares, officials said.

U.S. District Judge James Ware in San Jose also sentenced Ofstedahl to 100 hours of community service.

Ofstedahl, 44, pleaded guilty in November to lying under oath to federal investigators looking into the 1999 incident, when he was head of original equipment manufacturing sales at Milpitas, Calif.-based Adaptec. He was indicted on nine insider trading charges in July 2002.

Ofstedahl may also face a fine in his SEC case at a hearing in April. Ware postponed the start of Ofstedahl's electronic monitoring until June 1, so he can go on job interviews. Ofstedahl told the court he was going to lose his current job as chief executive of closely held Velio Communications Inc.

Robert Rutner, Ofstedahl's dentist, was charged with conspiracy to commit insider trading.

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