Ex-Stock Promoter Pleads Guilty to Fraud
Donald Kessler, a former stock promoter and chief executive of a New York asbestos-removal company, pleaded guilty to insider trading, income tax evasion and stock fraud. Kessler, 54, pleaded guilty in federal court in Brooklyn to misusing inside information about Spectrum Information Technologies Inc. and manipulating shares of Comprehensive Environmental Systems Inc., U.S. Atty. Zachary Carter said. Kessler did not pay income taxes on the fees of up to $10,000 he received to introduce executives of various companies to a “prominent business journalist” who then wrote stories or did TV broadcasts about the companies, prosecutors said. The charges stemmed from a federal investigation of Kessler’s relationship with former CNBC-TV commentator and USA Today columnist Dan Dorfman, whom BusinessWeek identified in its issue of Oct. 14, 1996, as the financial journalist cited in the federal action. Dorfman, now a columnist for Financial World magazine, was not charged with any wrongdoing. He has acknowledged that Kessler was a friend. As part of his plea agreement, Kessler admitted accepting stock worth $145,000 in April 1995 as compensation for arranging for Alter Sales Co. to be featured by the unidentified journalist. A favorable report on Alter was delivered by Dorfman on CNBC in April 1995.