Whitman Insider Trading Trial Opens

Aug 1 2012 | 2:28am ET

The insider-trading trial of hedge fund manager Doug Whitman got under way yesterday, with prosecutors telling the jury that the Whitman Capital Management founder traded on confidential information—and Whitman's lawyers telling them otherwise.

Whitman and "his partners in crime decided the rules of stock-trading did not apply" to them, prosecutor Christopher LaVigne told the jury in the case, which was also picked yesterday. LaVigne said that Whitman had traded illegally the stocks of a number of technology companies that he received "sneak peaks" about from three co-conspirators—all of whom are cooperating with the government and will testify against Whitman.

Whitman's lawyer, David Anderson, countered that the three cooperators are "criminals and liars" who agreed to testify to save their own skins. "They are desperate people making false accusations," he said. In particular, he hammered at Roomy Khan, a former Intel Inc. and Galleon Group employee, who has pleaded guilty to insider-trading charges twice, including as part of the Galleon case.

"Khan has never been held to account for her crimes," Anderson said. "She has never been held to account for her lies. She's hoping you convict Mr. Whitman so she can remain free."

Anderson also said that his client "did not pay or corrupt anyone for inside information."

The 15 members of the jury—there are three alternates—include five teachers. But it does not include several people with ties to investment banks, people who said they distrusted "Wall Street in general," and U.S. District Judge Jed Rakoff's own daughter.

Rakoff, who is presiding over the trial, joked that he hoped she would have been selected, as it "would be the first time ever that she followed the court's instructions."

Whitman allegedly made almost $1 million in illegal profits. He faces up to 25 years in prison if convicted.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.