2 Get Probation, Fines for Insider Trading

A federal judge sentenced a Thousand Oaks executive and his psychotherapist friend to probation and fined them each $20,000 Monday for practicing insider trading on stock information the counselor gleaned from a patient.

Kenneth E. Rottenberg, a vice president with a company that makes earthquake preparedness kits, admitted in December that he and his friend, Santa Monica marriage counselor Mervyn Cooper, made more than $120,000 on an illegal stock tip.

Cooper, who had been practicing psychotherapy for 35 years, had been counseling a top Lockheed Corp. executive who confided that he was negotiating a major financial deal days before the company announced its $10-billion merger with Martin Marietta Corp. in August 1994.

Just hours after that session, Cooper, 56, and Rottenberg, 55, bought $7,000 worth of Lockheed stock. When the merger was announced, the investment was worth $127,575, federal prosecutors said.

In addition to the fines, U.S. District Judge Stephen V. Wilson ordered each man to perform 1,000 hours of community service. Rottenberg earlier had paid a $50,000 fine to the Securities and Exchange Commission and Cooper paid $110,000.

Cooper and Rottenberg previously had pleaded guilty to one count of insider trading. Rottenberg also pleaded guilty to perjury for lying to the SEC about his stock trading activity. He initially told investigators that he bought the stocks without any insider tips and on the strength of information available to the general public.