THOUSAND OAKS : Stockbroker Gets 30 Months for Fraud

A New York stockbroker has been sentenced to 30 months in prison for manipulating stock at Magna Technologies, a now-defunct Thousand Oaks company.

Herbert Stone, 63, who pleaded guilty to 12 counts of conspiracy and securities and wire fraud, was sentenced in Los Angeles this week by U.S. District Judge Terry J. Hatter Jr.

Magna Technologies was a shell corporation with few assets, no business income and substantial debts, said Assistant U.S. Atty. John F. Walsh. Stone and other defendants in the case used the corporation to manipulate the penny stock market and reap the benefits of an artificially high stock price, he said.

“The total loss to brokerage houses and investors was more than $3.2 million,” Walsh said.

Also charged in the indictment were Jacob Rubenstein, 46, formerly of Woodland Hills, Robert Gutstein, 53, of Thousand Oaks and Robert Victor, 53, of Las Vegas.

Rubenstein, the principal promoter and stockholder of the company, is a fugitive. Gutstein, a Thousand Oaks plastic surgeon and chairman of the company, was convicted of conspiracy, securities fraud and wire fraud and will be sentenced this summer. Victor, a San Fernando Valley-based businessman who helped provide financing for the scheme, pleaded guilty to securities and tax fraud and also will be sentenced this summer.

Stone bought and sold company stock on the account of his firm, Norbay Securities. He manipulated the stock in several ways to heighten the appearance of activity and demand for the stock, Walsh said.

Stone is now serving a two-year sentence at a Wisconsin prison camp for a similar scheme involving the stock of another company, Walsh said. The new sentence will run concurrently.