Tuesday, 3 March 2015
Last updated 9 hours ago
Aug 20 2012 | 2:14pm ET
Hedge fund manager Doug Whitman has been found guilty of insider trading.
It took a jury just a few hours over two days of deliberations to return four guilty verdicts against the Whitman Capital founder. Prosecutors had accused Whitman of earning almost $1 million trading technology stocks after receiving confidential corporate information from several sources.
Whitman was convicted on two counts each of conspiracy and securities fraud. He will be sentenced on Dec. 20. He faces decades in prison, including 20 years on the securities fraud charges.
Whitman, who became the first defendant to take the stand in his own defense in the recent insider-trading crackdown, is the eighth person convicted by a jury in that crackdown. Prosecutors have yet to lose a jury verdict and have won dozens of guilty pleas, as well, including from the three witnesses whose testimony helped sink Whitman.
Whitman did not react when the verdict was read. Neither he nor his lawyer, nor any of the 12 jurors, commented after leaving the Manhattan federal court.
Prosecutors presented evidence that Whitman illegally traded shares of Google Inc., Marvell Technology Group and Polycom Inc. Whitman's former neighbor and former Intel Corp. and Galleon Group employee Roomy Khan testified against him, as did former consultant Karl Motey and former SAC Capital Advisors trader Wesley Wang.
On the stand, Whitman told the jury that he did not trade on material, non-public information, and that his decisions were made only after intensive, and legal, research. He also tried to explain his understanding of insider-trading, saying that he could trade on general information he received from corporate insiders but not exact numbers.
"Douglas Whitman now joins the grim procession of convicted Wall Street professionals who decided that the rules don't apply to them," U.S. Attorney Preet Bharara said. "The rules do apply."
"Mr. Whitman had a hedge fund with his name on the door, with rules against insider trading. He flouted those rules, tarnished his name and now is a convicted felon facing imprisonment."
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…