James D. Hutchinson, a Washington attorney and once a law clerk to Chief Justice Warren E. Burger, has been fined $10,000 after pleading guilty to passing insider stock information last year to a friend in Nebraska about Whittaker Corp.'s then-proposed acquisition of Brunswick Corp.
Hutchinson, 39, formerly a partner in the prominent law firm of Steptoe & Johnson and now in practice alone, told U.S. District Judge Louis F. Oberdorfer on Friday that he "did not know of the regulation I violated."
Hutchinson's attorney, Judah Best, told Oberdorfer his client would pay the maximum penalty, the $10,000 fine, for communicating material, non-public information about the would-be Whittaker purchase "so he can get this behind him and lead a more normal life." Oberdorfer said he usually asked for a presentencing report, but accepted Best's offer and imposed the fine.
Best said that Hutchinson's offense "is the one incident in his life he cannot account for." Hutchinson, who specializes in pension law, was an associate deputy attorney general in the Justice Department in 1975 and also administrator of the Labor Department's pension programs in 1975-76.
Assistant U.S. Attorney Richard L. Beizer said that Hutchinson learned of Whittaker's proposed stock tender offer, passed along the information to the friend in Nebraska and then bought Brunswick stock options himself.
Hutchinson, along with an attorney and bank official from Los Angeles, made $160,000 in profits on stock and call-option contracts that they purchased based on the non-public information, according to the Securities and Exchange Commission, but they paid back the profits last year as settlement of SEC charges against them.
Brunswick eventually fought off Whittaker's takeover bid.