Broker Found Guilty in Insider Case

NEW YORK —  A federal jury convicted a Gruntal & Co. broker Tuesday of trading on inside information about the 1986 takeover of Waldbaum Inc. by Great Atlantic & Pacific Tea Co.

Robert Chestman was found guilty of 31 counts of securities and mail fraud as well as perjury. After his indictment Chestman was placed on leave of absence by Gruntal and the firm said at the time he was an account executive with no corporate title.

Chestman, who is scheduled to be sentenced April 25, faces a maximum sentence of five years in prison on each count. He also faces a fine of as much as twice the total gain from the transactions. Based on figures from the indictment, Chestman had a profit of $76,125.

The indictment against Chestman alleged that on Nov. 26, 1986, he learned from a member of the Waldbaum family that the company was about to be sold. He then bought for himself 3,000 Waldbaum shares for $24.625 each.

He also bought 1,000 shares for the Waldbaum family member and 7,000 shares for several of his other clients all for $26 each, the indictment alleged.

On Nov. 28 and Dec. 1, Chestman allegedly sold the clients’ shares for $49 each. The indictment said Chestman sold his shares on or about Jan. 6, 1987, for $50 each.