A former Cruttenden & Co. stockbroker pleaded guilty Wednesday to receiving gifts, including a $50,000 Jaguar luxury car, from Spectrum Information Technologies in return for helping the wireless data company manipulate its stock price.
Federal prosecutors said Reagan Richmond, 34, of Tustin, conspired to manipulate Spectrum stock between 1992 and 1994 while working as a broker at Irvine-based Cruttenden, now known as Cruttenden Roth, and at Regency Capital Group Inc. in Glendale.
Richmond admitted recommending the stock to brokers and investors while receiving undisclosed payments from Spectrum, including $10,000, the Jaguar, first-class airline tickets to New York, limousine service and use of a New York apartment.
Prosecutors say Richmond conspired with a consultant for Spectrum and with Rocky Aoki, founder of Benihana Inc., in an insider trading scheme to buy Spectrum stock in 1993.
Aoki made a profit of about $300,000 on the deal, the government said.
Richmond, appearing before U.S. District Judge I. Leo Glasser in Brooklyn, N.Y., pleaded guilty to two counts of conspiring to commit securities fraud. He also agreed to cooperate with the continuing investigation by U.S. postal inspectors.
Richmond will be sentenced Sept. 24. He faces up to five years in prison and up to a $250,000 fine.
Cruttenden Roth in-house counsel Richard Platt said he never heard of the case until Wednesday. Richmond joined the brokerage in 1991 and left voluntarily in January 1993. Nothing in his personnel file suggested any wrongdoing, Platt said.
Regency Capital Group officials couldn’t be reached for comment.
Spectrum’s shares soared 46% on Oct. 18, 1993, after the tiny, money-losing Long Island, N.Y., company hired John Sculley, former chief executive of Apple Computer. The stock plummeted when he quit less than four months later.
Richmond wasn’t available for comment.