By Nate Raymond
BOSTON (Reuters) - A former Eaton Vance Corp (N:EV) portfolio manager was sentenced to 1-1/2 years in prison on Wednesday for engaging in a fraudulent options trading scheme that prosecutors said had netted him more than $1.5 million in profits.
Kevin Amell, a former vice president at the asset management company, was sentenced by U.S. District Judge Indira Talwani in Boston after pleading guilty in May to one count of securities fraud.
His lawyer, Karen Pickett, had pushed for 12-months of home confinement for Amell, 45, who she said had taken steps to make amends. But Talwani said a prison term was needed to send a message to others in a similar position in the financial sector.
"People in your business are going to be paying attention to this because they have the same temptations every day," Talwani said.
Amell, who must also pay restitution to Boston-based Eaton Vance and forfeit more than $1.9 million, apologized in court to his former employer and to family members who attended his sentencing.
"I'm not going be able to eloquently express how sorry and ashamed I am by this," Amell said.
According to prosecutors, from December 2014 to February 2017, Amell caused Eaton Vance mutual funds to sell options at below-market prices. Prosecutors said he then bought them using his personal brokerage accounts.
He then turned around and resold those options at the higher market price, taking for himself profits that could have been realized by Eaton Vance, prosecutors said.
He executed more than 250 such trades, in which he also occasionally bought options in the open market that he then resold to Eaton Vance at a higher price, prosecutors said.
They said the scheme allowed Amell to earn over $1.5 million, and he could have made another $400,000 had he executed certain follow-on trades promptly.
"The defendant was in position of trust and he violated that trust for his own benefit," Assistant U.S. Attorney Stephen Frank said.
Prosecutors in court papers said Amell's crime stemmed partly from poor decision-making after a "challenging personal circumstance" and the pressure flowing from a difficult divorce.
Eaton Vance, which as of April 30 had $380.9 billion in consolidated assets under management, has previously said it was committed to ensuring its funds were fully reimbursed for any harm they suffered.
The case is U.S. v. Amell, U.S. District Court, District of Massachusetts, No. 17-cr-10101.