Man Charged With Illegally Profiting From Disney's Purchase of Marvel
The SEC says Toby Scammell used his relationship with his girlfriend, a Disney employee at the time, to make $192,000 through an insider-trading scheme.
A man who made a 3,000 percent profit buying Marvel call options just before Disney purchased the company was charged with insider trading, the Securities and Exchange Commission said Thursday.
The SEC said Toby Scammell was working at an investment fund in August 2009 when, acting on information he obtained from his girlfriend, a Disney employee, he loaded up on Marvel options that soared in value once Disney said it would acquire the company for $4.2 billion.
The SEC also said that Scammell secretly used money from accounts owned by his brother, a U.S military man. Scammell had access because he controlled those accounts while his brother served in Iraq a few years earlier.
The SEC did not name the brother or girlfriend and said neither was involved in wrongdoing.
“This does not involve Disney and the complaint speaks for itself,” a Disney spokeswoman said Thursday.
The incident is the second in a year where a man tried to profit from information obtained by a Disney employee he was romantically involved with.
In October, Yonni Sebbag tried to sell early access to a Disney quarterly earnings report that his girlfriend, Bonnie Hoxie, an assistant to Disney’s head of corporate communications at the time, would supply him. Sebbag was sentenced to 27 months in prison and Hoxie was given four months of home confinement.
In the case of Scammell, the SEC said the girlfriend spoke to him about an upcoming transaction but didn’t give details due to “confidentiality.”
The girlfriend was described as “an extern in Disney’s corporate strategy department” who “possessed confidential details about the pricing and timing of the deal.”
According the SEC, Scammell learned that Disney was about to buy Marvel in a variety of ways, including listening in on his live-in girlfriend’s conversations.
The girlfriend was also considering writing about the Disney-Marvel acquisition as part of her application to business schools, a decision Scammell was aware of and in a position to exploit.
The SEC said Scammell’s trades stood out because he didn’t usually deal with call options, and because he was purchasing Marvel options with unusually high strike prices: $45 and $50, even though the stock never traded above $41.74. The options were also set to expire worthless a month after he purchased them if the stock didn’t rise dramatically.
Scammell bought $5,400 worth of Marvel call options and cashed them in for a $192,000 profit in less than a month, the SEC said.