Advisor Guilty in Sirius Case

Talk-show host Howard Stern’s move to Sirius Satellite Radio Inc. may mean jail time for an accountant at his tax advisory firm.

Gary Herwitz, the former president of Mahoney, Cohen & Co., Stern’s longtime tax and financial advisor, on Monday pleaded guilty to insider trading in Brooklyn federal court. Herwitz bought shares of Sirius last year after learning that Stern had asked the Mahoney firm for advice about moving to Sirius, prosecutors said.

Herwitz, 50, and former Sirius executive Tracey Stanyer, 39, also settled a civil insider-trading case brought by the Securities and Exchange Commission.

Stern, who on Friday hosted his last show on free radio, wasn’t accused of wrongdoing. He will begin to broadcast on pay-radio Sirius on Jan. 9.

Prosecutors said Herwitz learned from Mahoney’s chief executive that Sirius made a written offer to Stern on Sept. 21, 2004. Herwitz was told the information was confidential, the government said. Nine days later, he bought 25,000 shares of Sirius for $3.19 a share, prosecutors said.

On Oct. 6, 2004, Sirius and Stern announced a five-year deal. The stock jumped 15% that day, to $3.87, and continued to climb, to $7.62 by the end of the year. Herwitz sold most of his shares at a profit between Nov. 19 and Jan. 10, the SEC said.

Stanyer learned from a senior Sirius executive in September 2004 that the company was in secret talks with Stern, the SEC said. On Oct. 5, Stanyer bought 29,120 Sirius shares at prices ranging from $3.28 to $3.32 each. He sold the stock at a profit Oct. 7 and 8, the agency said.

Herwitz faces a maximum possible prison sentence of 20 years and a $5-million fine.

Herwitz’s attorney could not be reached for comment. An attorney for Stanyer declined to comment.