Sunday, 21 December 2014
Last updated 1 day ago
Oct 16 2007 | 5:04am ET
A former Idaho hedge fund manager got off relatively easy when he was sentenced yesterday on fraud charges.
John Whittier, the founder of the now-defunct hedge fund Wood River Capital Management, was sentenced to three years in prison by a federal judge in Manhattan, far less than the 15½ to 19½ years called for in his May plea agreement. U.S. District Judge Jed Rakoff indicated that Whittier’s autistic child led him to hand down the much lighter punishment.
“Mr. Whittier is a very significant component in the development of his autistic child,” Rakoff said. “Bad as what Mr. Whittier did… people he was cheating were not people who were rendered destitute as a result.”
Not destitute, perhaps, but roughly $88 million lighter in the pocket: Whittier admitted pouring 85% of his funds’ portfolios into Endwave Corp. stock. Not only was that in contravention of the funds’ promise not to invest any more than 10% of their portfolios in any one company, but he failed to report the holding in the California radio equipment maker—which amounted to 80% of its shares—to the Securities and Exchange Commission, as required. He also admitted that he failed to disclose his holdings in New Jersey publishing concern Mediabay.
In addition to being sentenced to three years incarceration, Whittier will also have to forfeit about $5.5 million. He is set to report to prison on Jan. 15.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.