A U.S. judge sentenced defunct day-trading firm A.B. Watley Inc.'s former president on Thursday to four years in prison in a scheme to misuse brokerage firm "squawk boxes."

At a hearing Thursday, U.S. District Judge John Gleeson in Brooklyn, sentenced Robert Malin, A.B. Watley's former president, to four years in prison, to be followed by four years' supervised release. He ordered Malin to forfeit more than $242,000.

"I stand before you a humbled man," Malin said before sentencing. "I am truly sorry for any pain I have inflicted."

Malin was among six men convicted of a single count of conspiracy after a three-week retrial in April.

The other men are Kenneth Mahaffy Jr., a former broker at Bank of America Corp.'s (BAC) Merrill Lynch & Co. and Citigroup Inc.'s (C) Smith Barney; Timothy O'Connell, a former Merrill broker; David Ghysels Jr., a former Lehman Brothers Holdings Inc. broker; Linus Nwaigwe, Watley's ex-director of compliance; and Keevin H. Leonard, who at one time supervised and trained Watley's day traders.

Mahaffey was sentenced to two years in prison, while Ghysels was sentenced to three years' probation, six months of which would be served as home detention.

Lawyers for Malin, Mahaffey and Ghysels indicated during the hearing that their clients intend to appeal their convictions.

Nwaigwe and Leonard are expected to be sentenced later Thursday. The sentencing hearing is ongoing.

O'Connell is expected to be sentenced separately next week.

Prosecutors had alleged that three ex-brokers placed open telephone lines next to the internal speaker systems at their companies so day traders at the now-defunct Watley could secretly eavesdrop on block orders by institutional clients.

The day traders would then use that information to front-run, or improperly jump ahead of client orders, the government said. The brokers were bribed with cash and "wash" trades, or transactions designed simply to generate a commission, prosecutors said. The conduct allegedly occurred between 2002 and early 2004.

In May 2007, a jury delivered a partial verdict in the original case, and a mistrial was declared after jurors failed to reach a verdict on the conspiracy count.

In July 2008, the U.S. Second Circuit Court of Appeals allowed the retrial to proceed, rejecting arguments the government should be barred from retrying the men on double-jeopardy grounds.

The appellate court in July 2008 also overturned O'Connell's conviction in the first trial of making a false statement and ordered a new trial on that count, citing an improper instruction to the jury. That count is pending.

The circuit upheld his conviction on a witness-tampering count in the first trial.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com