Ex-Kings Owner Pleads Guilty to Insider Trading

Jeffrey P. Sudikoff, a former owner of the Los Angeles Kings hockey team and once a well-known Los Angeles businessman, pleaded guilty Friday to insider-trading charges in connection with his now-defunct Culver City communications firm.

With his plea, Sudikoff, 43, settled federal charges that he spread phony information to inflate shares in IDB Communications Group, once one of the fastest-growing companies in Los Angeles and a Wall Street darling.

Sudikoff pleaded guilty to two counts of insider trading and to the charge of failure to file a proper form with the Securities and Exchange Commission, said his attorney, Michael R. Doyen. Sudikoff, who was chairman of IDB, faces 12 to 18 months in jail and will pay a $3-million fine, the lawyer said.

Sudikoff started IDB Communications in 1984 with just $15,000. The firm grew into a powerful global satellite network with more than $300 million in annual revenues and 800 employees.

Sudikoff’s stature grew, and he was listed among an elite group of “America’s smart young entrepreneurs,” in March 1994. IDB was sold several months later.

The federal grand jury also charged Sudikoff with conspiracy, forgery, lying to auditors and investors, issuing phony press releases and filing fraudulent documents with the SEC, but those were dropped as part of the plea, Doyen said. Sudikoff and his business partner, Edward Cheramy, were accused in 1997 of inflating the IDB’s first-quarter 1994 numbers to meet Wall Street analysts’ projections.

“The heart of the government’s 4 1/2-year investigation and prosecution has been allegations that Jeffrey Sudikoff forged documents and falsely inflated IDB’s earnings. . . . We are very glad those charges are being dismissed,” said Brad Brian, another of Sudikoff’s lawyers.

A 1997 indictment by a federal grand jury charged that Sudikoff sold $1.6 million worth of shares in March 1994 and failed to disclose the sale in proper filings. The indictment also charged that while possessing insider information, he tried to sell large blocks of IDB stock before it dropped in value.

His lawyer said Friday those trades were never completed.

Cheramy, 55, who now lives in Jackson Hole, Wyo., still faces criminal fraud charges. His trial is slated for summer.

Both Sudikoff and Cheramy still face civil charges filed by the SEC in 1997, said Karen Mattefon, a senior trial counsel for the SEC.

Sudikoff’s sentencing hearing is scheduled July 12 in Los Angeles.

Sudikoff, who along with a partner bought the Los Angeles Kings in 1994, is not the first former Kings owner to run into trouble. Bruce McNall, who sold a portion of the Kings to Sudikoff, went to prison in 1997 to serve five years in an unrelated case of bank fraud.

Sudikoff, who still lives on the Westside, could not be reached for comment.