Since charging Toby Scammell, a young California trader, with profiting from insider information on the Disney acquisition of Marvell Entertainment, the SEC has been a "punching bag" for Mr. Scammell.  The trader, who generated a 3000% profit by trading out-of-the-money call options, has ruthlessly attacked the SEC and now appears to be winning in the "court of public opinion" - as if that ever changed the final outcome of SEC cases like this. 

Perhaps the SEC probably doesn't know what to do with Mr. Scammell - and who would?  For one thing, it's rare that a person who's charged with insider trading fights back, especially in such a vocal and offensive manner.

Scammell Uses All Forms of Media.   In multiple emails to the media, along with his blog SECfail.com, Scammell has railed against the commission's practices and conduct in the case, claiming the SEC has deliberately distorted facts in the case.  He comes across as livid in response to what he views as an uninformed witch hunt.  Most important, he exudes confidence that a full assessment of the facts will exonerate him.

In those emails, he called the SEC the "financial regulatory equivalent" of the DMV, noting:  "If the SEC understood how to read a bank statement or how call options worked, then I wouldn’t be writing this.  But this is the SEC - an incompetent government agency filled with bumbling lawyers who don’t understand the first thing about the markets they’re charged with regulating."

In an interview that Dealbook conducted by email, Scammell highlighted his distaste for the SEC as well as his confidence that he'll prevail. Asked why he's been so vocal about the case, he wrote:

"I’m just setting the record straight by presenting the full set of facts. The SEC did a great job cherry-picking and distorting facts to create a compelling narrative - they should be congratulated for their ability to manipulate the media.  But this is my life and I can’t allow these falsehoods to go unchallenged."

Scammell's lawyer is apparently on vacation, and it's unclear how happy he may or may not be with his client's actions.  But one thing's for sure - Scammell has guaranteed that his case gets plenty of coverage in the press.  For the Q&A interview with Scammell, go to:   [Dealbook, 8/19/11]