Insider Trading Trials Opens—13 Years After Deal

May 15 2014 | 12:51pm ET

After eight years of motions, appeals and reversals, hedge fund manager Nelson Obus is getting a very unwelcome day in court.

Jury selection began today in the Wynnefield Capital founder’s civil insider-trading trial. The Securities and Exchange Commission sued Obus, Wynnefield and two others for allegedly trading on confidential information about Allied Capital Corp.’s planned acquisition of SunSource way back in 2001.

In 2010, Obus won the case’s dismissal. But a federal appeals court two years ago revived the case.

According to the SEC, Thomas Strickland, a friend of Wynnefield analyst Peter Black, tipped Black off about the impending deal. Strickland worked at GE Capital, and worked on the Allied-SunSource deal. Wynnefield allegedly earned $1.34 million on the trades.

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