Emulex Stock Scam Perpetrator Gets 44 Months
A U.S. district judge Monday sentenced an El Segundo man to nearly four years in federal prison for his part in a stock scam that cost Emulex Corp. investors millions of dollars.
Mark Simeon Jakob, 24, pleaded guilty to two counts of securities fraud and one count of wire fraud in December. On Monday, Judge Dickran Tevrizian Jr. gave Jakob until Sept. 5 to turn himself in to serve 44 months for his crimes.
Jakob last year issued a false news release on the Internet that claimed that Emulex was in trouble, causing the stock price to plummet before it rebounded. Meanwhile, Jakob traded his stock for nearly a $250,000 profit.
Financial experts and company officials have said the scheme cost investors about $110 million. Some investors wrote letters to the court regarding their losses.
“It’s not until I see what some of these investors went through that I realize what I really did cause,” Jakob said to the judge before he was sentenced.
“I just want you to know I read these statements from these investors and I really am sorry for what I did and I will try to pay back what I made them lose.”
Tevrizian, before announcing the sentence, expressed concern over the magnitude of Jakob’s crime, comparing it to “dropping an atomic bomb” on the financial institutions of the country.
“When you play around with the stock market, you can cause a great deal of hurt,” Tevrizian said.
“The thing that bothers me is these financial markets are so fragile. If this is done on a wide scale basis, it could be disastrous.”
Jakob’s attorney, Joel Levine, characterized his client as a normally law-abiding citizen who panicked when a hunch he had about his Emulex stock proved wrong and he was faced with losing $97,000.
Levine said the fact that Jakob abused medications for depression and panic attacks played a role in his committing the crime.
Jakob must serve at least 85%, or three years, of the sentence, said Assistant U.S. Atty. Pamela Johnston, who prosecuted the case.
She said Jakob cooperated with the investigation from the beginning.
Tevrizian waived any restitution fines in the case, saying that was handled in Jakob’s civil case with the Securities Exchange Commission, where he was ordered to pay nearly $350,000.
