Whitman Testifies, Denies Trading On Insider Info.

Aug 14 2012 | 1:16pm ET

Accused insider-trader Doug Whitman took the stand in his own defense yesterday, making a risky gamble that jurors will believe him over the government's three cooperating witnesses.

Whitman, whose testimony will continue today, focused on one of those three, Roomy Khan, yesterday. He denied trading on confidential information she gave him about Polycom Inc. and disputed her claim that he "hounded" her for information from a Polycom executive, Sunil Bhalla.

"She told me not to do anything until she talked to Sunil Bhalla," Whitman said. "I really didn't care. We had already started our investment decision."

Whitman told the jury that he and his firm, Whitman Capital, did legitimate investment research, talking with corporate management as well as industry experts such as Khan, a former Intel Corp. executive and Galleon Group employee. Whitman said he and Khan spoke about once a week, and while he called her "very smart," he said their weekly confabs covered things beyond business.

"We probably talked most about her personal life, more than anything else," Whitman said of his former Atherton, Calif., neighbor. He did allow that they "also talked about stocks" and "industry things," but he said he didn't know that she had pleaded guilty to insider-trading in 2010.

Whitman is the first person accused in the government's crackdown on insider-trading to take the stand in his own defense. The move leaves him open to cross-examination by prosecutors, which could come as soon as today; Whitman faces decades in prison if convicted on the conspiracy and securities fraud charges.

Whitman took the stand after prosecutors rested yesterday. Their last witness was a California florist, who testified that Whitman sent a $125 bouquet to Khan in July 2009—as a thank-you for an insider tip about Google Inc., the government alleges.

Separately yesterday, Whitman's lawyers asked for permission to read from Bhalla's testimony in a civil suit last year, in which he said he never passed confidential information to Khan. U.S. District Judge Jed Rakoff has yet to rule on that request.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

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

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

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.