Sunday, December 18, 2005
Former Ohio State University business school professor Roger Blackwell received a 6-year (72-month) prison term from his conviction in June on charges arising from an insider trading scheme. Blackwell is a well-known marketing expert who has worked with a number of companies on their business and marketing strategies. Blackwell's business, Roger Blackwell Associates (RogerBlackwell.com), touts his many accomplishments but does not quite mention his conviction. Blackwell resigned his position at OSU after the conviction.
Blackwell was convicted of one count of conspiracy to commit insider trading, one count of conspiracy to obstruct justice, 14 counts of insider trading, two counts of making false statements, and one count of obstruction of an SEC proceeding. In addition, a Blackwell Associates employee and her husband were also convicted of the same charges (see U.S. Attorney's Office press release on the conviction here). Blackwell tipped, among others, Jack Kahl, a wealthy Cleveland businessman, about a pending acquisition of Worthington Foods by Kellogg. Blackwell was a director of Worthington Foods at the time of the transaction. Kahl testified against Blackwell under a grant of immunity.
A Cleveland Plain Dealer story (here) notes that Blackwell sent a letter to the district court before the sentencing stating that he succumbed to the temptations of wealth and fame. Tipping by a director cannot be more obviously wrong in this day and age, so the temptation (or perhaps the love of money and honor) must have been particularly powerful. A post by Doug Berman on the Sentencing Law & Policy blog (here) notes an e-mail from a reader that the judge sentenced Blackwell in the upper range of the Sentencing Guidelines for the offense (63-78 months) and departed upward in imposing a $1 million fine on Blackwell. His codefendants received 33 and 27 months. (ph)