A federal judge sentenced Encino jeweler Bryan Shaw to five months in prison Monday for his role in an insider trading scheme with a
Shaw, 53, was sentenced by Los Angeles U.S. District Judge George Wu, who shaved a month and a $3,000 fine off the prosecution's recommendation for a six-month sentence.
The jewelry store owner, who was joined by several family members in court, fought through tears to deliver a handwritten apology to Wu before the sentencing.
"I assure you that you will never, ever see me again," Shaw said.
In a written statement sent to the judge before sentencing regarding his cooperation, Shaw wrote, "To me it was the only path.... In the end I knew that cooperating with the government was part of me making things right...."
Shaw's lawyers argued in favor of a lower sentence because of the jeweler's valuable cooperation and lack of criminal history, as well as a need for him to provide for his family and business. Though Shaw's insider trading scheme was punishable by several years in prison, federal prosecutors recommended a reduced sentence because of his cooperation in the case.
But the judge said that mere probation would set the wrong precedent for others involved in insider trading, despite Shaw's cooperation.
"That's being overly, overly generous," Wu said directly after announcing the sentence. "Others will be more likely to take the risk, make the bet" without the threat of imprisonment, he added.
Immediately after the verdict, Shaw joined several weeping family members in a private room outside the courtroom. Shaw was given 60 days to turn himself in, and Wu recommended that he be imprisoned in a nonviolent offenders facility in either the federal correctional facility in Lompoc or at another facility in Taft.
Using confidential information and tips from then-KPMG accountant
In return for information, the jeweler gave London more than $70,000 in cash, concert tickets and jewelry.
After federal regulators froze Shaw's investment account because of suspicious activity, the jeweler fully confessed, paid back nearly $2 million in illegally gained profits and fines to the
London was sentenced this year to 14 months in a federal prison and forced to pay a $100,000 fine. He also was fired from his $900,000-a-year job as an auditor for KPMG in 2012, and the company was forced to redo several of London's prior audits.
Wu dismissed the prosecution's request to levy a $3,000 fine against Shaw, citing the nearly $2 million he already returned to the SEC, and levied only a $100 fee.
In a statement afterward, Shaw's attorney, Nathan Hochman, said the court's decision favorably reflected on his client's character.
"As the court recognized in imposing a sentence well below the guideline range, Mr. Shaw has led a 53-year life marked overwhelmingly by honesty, integrity and hard work," Hochman said in a statement. "He made a serious mistake in getting involved in insider trading with Scott London but then did everything he could to right that wrong."
Prosecutor and Assistant U.S. Atty. Deputy Chief James Bowman said he was happy with the sentence because it fairly straddled the line between sufficiently punishing Shaw and showing the benefits of cooperating with the government.
"We really tried to balance two important things" he said. "One is the seriousness of the crime.... If he did it only once, it'd be a serious crime, but he did it 14 times. At the same time, there are real benefits to cooperating."