Ex-Business Week Editor Gets 6-Month Prison Term
Seymour (Rudy) Ruderman, former broadcast editor of Business Week magazine, was sentenced Wednesday to six months in prison for trading on inside information obtained from the weekly before it was published.
In a brief statement to U.S. District Judge Robert J. Ward, Ruderman expressed regret for “a betrayal of the trust my employers and my audience vested in me.”
He pleaded guilty last December to two counts of mail fraud in connection with a scheme to buy securities on about 50 occasions while in possession of confidential information from Business Week’s “Inside Wall Street” column. Prosecutors have said in the past that Ruderman was charged with mail fraud because of the magazine’s weekly mail distribution.
Suffered Heart Attack
Business Week fired Ruderman, 62, of Scarsdale, N.Y., in August.
Ward also fined Ruderman $5,000 and put him on probation for three years following his release.
Ruderman raised his eyeglasses and pinched the bridge of his nose as Ward sentenced him. Ruderman’s wife, Anne, sat beside him.
Ruderman could have been sentenced to a maximum of five years in prison and $250,000 in fines on each of two counts of mail fraud.
Ward said he was taking Ruderman’s age and health into consideration.
Ruderman suffered a heart attack in 1977, underwent triple bypass surgery in 1983 and remains on heart medication.
Asked for Probation
According to court papers, Ruderman received page proofs of Business Week before its publication and bought the securities of companies that were to receive favorable mention in the “Inside Wall Street” column later that week.
Ruderman’s lawyer, Alan Kaufman, asked Ward to sentence his client to probation without jail time, saying the insider trading was an aberration in a life of “goodness and decency.”
Kaufman also said a prison sentence would serve no purpose as a general deterrence to the financial community since they have already “heard about and know about his downfall.”
But Ward said that while Ruderman had not had any prior brushes with the law, “justice must be administered in an even-handed way.”
In a choked voice, Ruderman called his illegal activities “an indisputable violation of journalistic ethics” and “a betrayal of my own standards and values as well as a cruel blow to my family and friends.”
The two sides differed in calculating the scope of the illegal trades. Prosecutors said Ruderman earned gross profits of $39,000, but Kaufman contended that Ruderman sustained a net loss of $2,000.
Kaufman said Ruderman has reached a $41,000 settlement of a Securities and Exchange Commission civil action, which is awaiting final approval by the SEC in Washington. The settlement sum includes illegal profits and penalties.
Ruderman remained free on $100,000 bond and was scheduled to surrender to prison authorities May 3.
