California Bar Journal
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Insider trading conviction leads to interim suspension
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A prominent northern California patent attorney who pleaded guilty to insider trading last year was placed on interim suspension by the State Bar Nov. 30. MALCOLM WITTENBERG [#73842], 55, of San Francisco was a longtime key member of Crosby Heafey Roach & May's patent group when he was indicted on two counts of insider trading and accused of making an illegal $14,000 profit on a stock deal.

He represented Forte Software Inc., an Oakland firm that merged with Sun Microsystems Inc. of Palo Alto in 1999. After learning of the impending merger, prosecutors said, Wittenberg bought 1,000 shares of Forte at a price of $13.50 a share. He later bought 1,000 more shares at a price of $14.75 per share.

The day the merger was announced, the stock closed at $21 per share, up 24 percent.

Wittenberg's Forte shares were converted to 600 shares of Sun. Less than a month later, he sold those shares, earning a profit of about $14,000, the indictment charged.

As part of a plea agreement, Wittenberg pleaded guilty to one count of insider trading and a second count was dropped. He reached a separate agreement with the Securities and Exchange Com-mission, paying $29,000 without admitting or denying any allegations of wrongdoing.

Although Wittenberg faced up to 10 years in prison and a $1 million fine on the single count of insider trading, he was sentenced by U.S. District Judge William Alsup to three years of probation.

In a cracking voice, he told the judge, "Standing here before you as a felon is as painful a situation I can imagine. I am pained by the disappointment of my family and my professional colleagues." He was ordered to serve a month at a halfway house and three months of home detention with electronic monitoring. Alsup also fined Wittenberg $10,000 and ordered him to give speeches to other attorneys, explaining his crime.

The judge described Wittenberg's conduct as "an aberrant act," said the profit was small and said the longtime attorney had led a "stellar life."

Prosecutors had asked for a four-month prison term.

Wittenberg could face summary disbarment if the State Bar deter-mines his crime involved moral turp-itude. He will remain on interim suspension until the final disposition of the criminal proceedings.

During a nearly 30-year career, Wittenberg's client list included Coca Cola Co., Levi Strauss & Co., Visa International and Wells Fargo Bank. A former U.S. Patent and Trademark Office patent examiner, he also clerked for a judge in the U.S. Court of Customs and Patent Appeals in Washington, D.C.

He resigned from Crosby Heafey in August.