Wednesday, 10 February 2016
Last updated 6 hours ago
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.