Technical Equities Founder Gets 5 Years for Fraud

Technical Equities founder Harry Stern was sentenced to a maximum five years in federal prison for securities and mail fraud.

U.S. District Judge William Ingram on Wednesday gave Stern the maximum sentence possible under an agreement with the U.S. Attorney’s Office in exchange for his cooperation in the case.

Before receiving his sentence, Stern stood before the judge and read a brief statement, saying his “greatest sorrow” was that his clients lost their money.

“I know that I will continue to spend the rest of my life feeling guilty,” said Stern, 58.

Ingram, without comment, then proceeded to impose the maximum sentence and ordered Stern to surrender Dec. 28 to begin his sentence. He is expected to serve his time in a federal correctional institution in either Pleasanton or Lompoc.

Stern, of San Jose, had pleaded guilty to securities and mail fraud.

Technical Equities investors lost $150 million when the company declared bankruptcy in early 1986. Hundreds of those investors later sued Stern, other company officers and financial advisers, alleging fraud. The San Jose firm bought metal and rubber manufacturing companies, traded real estate and managed investments before its collapse.