LOS ANGELES (CNS) - A former executive at a Hawthorne-based company was sentenced to nearly three years in federal prison today for insider trading, with prosecutors saying he misused confidential company information and illegally purchased shares of a firm his employer planned to acquire. Â
U.S. District Judge Dale S. Fischer said Mark A. Loman, 60, of Hermosa Beach, was motivated by greed when he ``betrayed his employer and the market.'' Along with the 35-month prison sentence, the judge ordered Loman to pay a $600,000 fine. Â
Loman was convicted in September of four federal counts each of securities fraud and insider trading, according to the U.S. Attorney's Office. Â
Prosectuors said Loman was the controller and vice president of finance for OSI Systems Inc., a publicly traded security, health care and electronics manufacturing company, from 2006 to 2018, giving him access to the company's revenue, earnings and confidential finance reports. Â
After receiving information in late 2015 that OSI was struggling financially and would fall short of its quarterly revenue estimates, Loman purchased ``options contracts'' that would allow him to profit when OSI's stock price fell, according to the U.S. Attorney's Office. Â
When the company announced its second-quarter earnings in January 2016, OSI's stock plunged by 30%, and Loman earned about $355,000 in illegal profits, prosecutors said. Â
Prosecutors also said that in March 2016, Loman bought stock in American Science & Engineering Inc., a Massachusetts-based manufacturer of security screening equipment that OSI had targeted for acquisition. When OSI publicly announced in June 2016 its plans to acquire AS&E, Loman sold his shares in the company and made about $120,000 in illegal profits, authorities said. In September 2016, OSI formally acquired AS&E for $270 million. Â
Loman collected about $475,000 in illicit gains through the scheme, according to federal prosecutors. Â
The Securities and Exchange Commission sued Loman in July 2019, accusing him of insider trading. An April 2022 trial date is set.