New York – The former president of an accounting firm used by Howard Stern pleaded guilty Monday to charges of insider trading in shares of Sirius Satellite Radio Inc. before the announcement of the shock jock’s move to the network.
Gary D. Herwitz, 50, formerly of Mahoney Cohen & Co., faces up to 16 months in prison at his sentencing on March 17.
“My trading in Sirius was wrong,” Herwitz told a judge during a hearing in federal court in Brooklyn.
Afterward, Herwitz ducked out of court through a side door without speaking to reporters.
His attorney, Marjorie Peerce, said her client “deeply regrets what happened, and he looks forward to getting on with his life.”
The scheme unfolded after Stern sought financial advice from the Manhattan firm’s chief executive – his personal accountant for the previous 19 years – about making a move to Sirius once his contract with Infinity Broadcasting Corp. expired, court papers said.
Infinity is part of Viacom Inc.
On Sept. 21, 2004, the CEO told Herwitz that Sirius had made Stern an offer. He also reminded the defendant to keep the pending deal confidential, court papers said.
About a week later, Herwitz violated federal law by buying 25,000 shares of Sirius stock based on nonpublic information, the papers said. Stern announced on Oct. 6 that he had signed a $500 million deal with Sirius to move his show to satellite.
Herwitz, who bought the stock at $3.19 a share on the Nasdaq Stock Market, saw the price jump to $4.29 a share following the announcement, court papers said. Federal authorities said he made about $18,000 in improper profits. Sirius’ shares fell 28 cents, 4 percent, to close at $6.67 Monday.
