2 Agree to Pay Fines in Trading Based on Early Information

A Newport Beach investor and a former stockbroker in the city have agreed to pay fines in connection with charges by the Securities and Exchange Commission that they profited from illegal trading on information obtained from advance copies of Business Week magazine.

The SEC said Thursday that Stephen R. Rasinski of Newport Beach has agreed that he owes the profit from his trades, $137,044, plus an equal amount in penalties and interest. However, all but $46,100 of the judgment was waived, based on his inability to pay, according to the SEC.

In a separate criminal case, Rasinski was sentenced in April to three years’ probation and fined $25,000 in federal court in Los Angeles. He had pleaded guilty to two counts of insider trading for paying a printing plant employee in Torrance to supply advance information about stocks that would be mentioned favorably in Business Week’s influential “Inside Wall Street” column.

Lawrence M. Small, a former stockbroker for Smith Barney Harris Upham & Co. in Newport Beach, agreed Thursday to repay $57,560 in profits, plus an equal amount in penalties and interest, according to the SEC.

The SEC waived penalties and interest, based on Small’s inability to pay.

In criminal court Small, who has moved out of state, has pleaded guilty to two counts of insider trading and is awaiting sentencing.

Thursday’s judgment, rendered in U.S. District Court in New York, gives the SEC the right to seek more fines against Small and Rasinski if the agency determines that they have misrepresented their finances.

Attorneys for Rasinski and Small could not be reached Thursday.

The defendants were charged in November with participating in the scheme, along with another former Smith Barney broker, John Petit, and with Shayne Walters, a former salesman for Business Week’s printer, R.R. Donnelley & Sons Co. of Torrance. Petit is serving six months in a community treatment center, and Walters is awaiting sentencing on criminal charges.

Jeffrey Zuckerman, a member of the SEC’s enforcement division in New York City and head of the Business Week investigation, said Thursday that more people may be charged. “The investigation is still open,” he said.

Thirteen people in several unrelated cases involving the magazine have been charged with wrongdoing.