A New York court has ruled that Donald Blackstad, owner, and director of a California-based investment fund, has been sentenced to 36 months in prison for insider trading and organizing a securities fraud scheme. Mr. Blackstad was a stock trader and owner of an investment fund known as Midcontinental Petroleum Inc. Assisted by an employee of Illumina, Inc.’s finance department, Blackstad learned in advance about the company’s financial statements, including its earnings. Taking advantage of this inside information, he made profitable deals with shares of Illumina just before the official publication of the reports. Following the public announcement of the company’s earnings, Mr. Blackstad closed his positions, making a total profit of over USD6 million.
Between 2015 and 2019, Mr Blackstad fraudulently received more than USD1 million from investors, encouraging them to make a one-time advance investment in securities issued by Midcontinental Petroleum, much of which was then misappropriated. In addition to his prison sentence, he was sentenced to pay restitution to the victims in the amount of USD669,000.