Shortly after the New York Southern District Court issued a prison sentence as to Donald Blakstad, a stock trader and the owner and principal of an investment fund, the defendant has made it clear he is challenging the judgment.

According to a set of documents filed with the Court on November 17, 2021, Blakstad is appealing from the judgment that sentenced him to 36 months in prison. The case will be taken to the Second Circuit Court of Appeals.

Let’s recall that Blakstad got the sentence for committing insider trading and orchestrating a securities offering fraud scheme.

Midcontinental Petroleum Inc purported to be in the business of soliciting investments in the energy industry. Martha Bustos was a former certified public accountant who worked in the finance department at Illumina, Inc, a San Diego-based biotechnology company whose securities trade on NASDAQ. By virtue of her employment at Illumina, Bustos had access to material nonpublic information about Illumina’s financial condition, including its earnings.

On several occasions, from 2016 through 2018, Blakstad obtained inside information about Illumina’s financial condition from Bustos before Illumina publicly announced its earnings and financial results. As Blakstad knew, Bustos owed a duty to keep inside information about Illumina confidential.

Blakstad used this inside information to make profitable trades in Illumina securities shortly before Illumina’s earnings announcements. At times, he tipped his associates so that they could trade Illumina stock and options based on the inside information. At other times, in order to avoid detection, he arranged for his associates to purchase Illumina securities for his benefit in accounts controlled by his associates.

Following the public announcement of Illumina’s earnings, Blakstad and his associates sold the Illumina securities at a significant profit, sometimes exceeding more than 2,000 percent. In total, Blakstad and his associates made more than $6 million in profits from purchasing and selling Illumina securities.

In addition, from at least in or about 2015 through at least in or about 2019, Blackstad devised and operated a securities offering fraud to fraudulently obtain more than a $1 million from a number of investors. He fraudulently induced victim investors to make up-front, lump-sum investments for securities issued by Midcontinental Petroleum, which funds Blakstad then misappropriated, in substantial part.

In total, Blakstad’s schemes yielded more than $7 million in criminal profits.

In addition to his prison term, Blakstad was sentenced to three years of supervised release and ordered to pay restitution to victims in the amount of $669,000.