Obus Testifies In Insider-Trading Case

May 28 2014 | 11:26am ET

More than a dozen years after he allegedly committed insider-trading, Nelson Obus yesterday got the chance to deny the charges with his own voice.

The Wynnefield Capital founder took the stand yesterday at his civil trial, at which he is accused of illegally trading SunSource shares in 2001. The Securities and Exchange Commission claims he learned of SunSource’s planned acquisition by Allied Capital Corp. from his analyst, Peter Black, who in turn learned it from a friend at GE Capital, Thomas Strickland.

The SEC claims that Obus all but admitted he had confidential information to SunSource’s CEO. Obus testified yesterday that he was actually worried about a separate financial arrangement the firm was considering.

Obus also denied telling Black that Strickland could “save himself” if the two could get their stories straight to the SEC. Instead, Obus testified, he told them to come clean. “One saves himself by telling the truth.”

Black and Strickland, as well as Wynnefield, which allegedly made $1.3 million on the trades, are also on trial.

Obus, who returns to the stand today, was relaxed on the stand, even while sparring with prosectors. He told the jury that his father, a retail stockbroker, had warned him about insider-trading.

“My father was very concerned with insider trading, and he passed that on to me,” Obus said. “He felt that the capital markets were a way for people to fulfill their dreams.”


In Depth

Star Fund Managers Battered By Rocky Ride In Yields, Currencies

May 28 2015 | 6:05am ET

Some of the biggest names in the investment world have been whipsawed by the recent...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

The Road To Tax Alpha

May 28 2015 | 5:36am ET

Tax-related alerts are increasingly helping investment managers harvest tax alpha...

 

Sponsored Content

Editor's Note