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

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…