Broker Sentenced to 30 Months in Magna Case

Herbert Stone, a former New York stockbroker who pleaded guilty last August to 12 counts of conspiracy, and securities and wire fraud in connection with a defunct Thousand Oaks company, last week was sentenced by a federal judge in Los Angeles to 30 months in prison.

Stone, 63, was one of four defendants accused of manipulating the stock of Magna Technologies Inc.--a publicly traded company with few assets, no income and substantial debts--and reaping more than $1 million in illicit profits. Due to various fraudulent schemes carried out by Stone and three of Magna’s principals, Magna’s stock rose from 50 cents a share in March, 1985, to $9.50 a share in September, 1985, before collapsing, federal prosecutors said.

Robert Gutstein, 53, a Thousand Oaks plastic surgeon and Magna’s former chairman, was convicted of five counts of conspiracy, and securities and wire fraud by a federal jury in Los Angeles in May. Robert Victor, 53, of Las Vegas, a Magna shareholder, pleaded guilty to four counts of securities and tax fraud in March. Both are scheduled to be sentenced this summer.

A fourth Magna defendant, Jacob Rubenstein, 46, a former Woodland Hills businessman who was the principal promoter of Magna’s stock, is a fugitive, federal prosecutors said.

U.S. District Judge Terry J. Hatter Jr. ordered Stone to serve the 30-month sentence concurrently with the last several months of a two-year sentence Stone is serving for his role in a separate stock fraud case.