Father Knows Best

• Share

JONATHAN SHEINBERG WAS VISITING HIS FATHER'S California home when he overheard Dad talking on the phone about selling his company to a Japanese firm. This wasn't just any dad. Sidney Sheinberg is president of Hollywood's giant MCA Inc., and he was talking about its yet undisclosed sale to Japan's Matsushita Electric Industrial Co. When Sheinberg Sr. realized that Junior was listening in, he correctly warned his son to keep the news to himself and certainly not trade in the stock. But Jonathan just couldn't keep a secret, the SEC says. He has agreed to pay $417,988 in penalties for leaking the news to three outsiders: his father-in-law, a friend and his business manager. The three, who invested in MCA stock before news of the 1990 deal surfaced, made a killing. But the $909,077 they will now have to pay as part of a settlement ultimately makes their original MCA buy "net-net," as they say, a bad investment.