September 18, 2015 / 10:30 PM / 2 years ago

Boston-area amateur golfer gets prison for country club insider trading

(Reuters) - A Boston-area amateur golfer was sentenced on Friday to 1-1/2 years in prison for engaging in an insider trading scheme involving tips to his golfing and other friends about the business activities of American Superconductor Corp.

Eric McPhail, 41, was sentenced by U.S. District Judge Denise Casper in Boston after a federal judge in June found the marble salesman guilty of conspiracy and securities fraud charges.

His sentencing came after Douglas Parigian, a lawyer who was a golfing buddy of McPhail‘s, was sentenced in August to eight months of home confinement in light of his guilty plea to charges connected to the scheme.

At sentencing, prosecutors sought 4-1/4 years in prison for McPhail, saying it would help deter others who might participate in the “insider trading cliché” of tipping fellow country club members to corporate secrets.

McPhail’s sentence was confirmed by a spokeswoman for U.S. Attorney Carmen Ortiz in Boston.

McPhail’s lawyer, William Cintolo, said he would appeal the conviction, citing a major ruling by an appellate court in New York that narrowed the reach of insider trading laws.

In court papers, prosecutors called McPhail the “linchpin” in an insider trading conspiracy from 2009 to 2011 that netted its seven participants nearly $750,000.

Prosecutors said McPhail learned secret information about American Superconductor from a then-senior executive, Angelo Santamaria, who, like him, belonged to the Oakley Country Club in Watertown, Massachusetts.

Despite hearing the information in confidence, McPhail engaged in an “extended betrayal” of Santamaria by sharing details about the company’s business activities and earnings announcements with friends and fellow golfers, prosecutors said.

Those seven friends included Parigian, who prosecutors in a court filing last week said made $301,381 in profits.

McPhail and Parigian were both criminally charged in 2014. Five others in the scheme were charged civilly by the U.S. Securities and Exchange Commission, four of whom agreed to settle for $145,309.

The case is U.S. v. McPhail, U.S. District Court, District of Massachusetts, No. 14-cr-10201.

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