The manager of a Menlo Park-based hedge fund was charged with alleged insider trading Friday, Feb. 10, the Securities and Exchange Commission announced.
Atherton resident Doug Whitman, 54, of Whitman Capital was arrested in connection with an insider trading ring linked to hedge fund advisory firm Galleon Management.
His attorney, David Anderson of Sidley Austin LLP, issued a statement asserting his client’s innocence and cooperation with the investigation. “The charges are based on claims made by Roomy Khan and Karl Motey, who have pled guilty to insider trading and conspiracy, and who hope to reduce their prison sentences by accusing Mr. Whitman. Their claims are false and will be proved false,” the statement concluded.
The Securities and Exchange Commission (SEC) alleged that Whitman illegally traded based on non-public information obtained from friend and neighbor Khan. In its complaint, the agency stated that Whitman got confidential information around six years ago about Polycom and Google earnings in 2005 and 2007, estimating that he then allegedly earned nearly $1 million by trading on the information.
“Whitman engaged in what even he termed ‘slimeball’ activity and together with Khan brought new illicit meaning to the maxim ‘help thy neighbor,'” said George Canellos, director of the SEC’s New York Regional Office in a written statement.
According to the SEC’s complaint, filed in a Manhattan federal court, the information about Polycom and Google is the same inside information that the SEC previously alleged Khan provided to other hedge fund contacts.
The complaint alleges that Whitman Capital accumulated 132,263 shares of Polycom stock and then liquidated it after getting the tip from Khan for a profit of more than $360,000. On at least one later occasion, in September 2008, Whitman allegedly asked her for further information and suggested using Skype to avoid detection, the SEC said.
The complaint further alleges Whitman illicitly earned $620,000 in 2007 from similar information about Google’s quarterly financial results. Afterward, according to the SEC, Whitman sent Khan flowers as a thank you.
The SEC has charged 30 defendants to date in its Galleon-related investigation. The insider trading occurred at more than 15 companies for profits of more than $91 million, according to the agency.
Heh heh, the rich flip on each other just like street thugs. Let the dog fight amongst them & their attorneys continue! Greed, greed, greed.
One percenters like this caused the recession that our country is still escaping. Throw the book at all of them. Make them pay for the economic devastation that they have caused across the country.
Don’t know why the newspapers rarely print the mug shots of one-percenters when they get busted. Here is his photo from an old interview: http://blogs.barrons.com/techtraderdaily/2006/06/19/picks-doug-whitman-likes-marvell-mrvl-va-software-lnux-dsp-group-dspg-part-1/
If you see him on the street, you can tell him what you think of his crimes against our country.
> The charges are based on claims made by Roomy Khan
Seems Ms. Khan has been involved with the FBI and “insider trading” for some time now–
http://dealbook.nytimes.com/2009/10/21/ex-employee-is-key-witness-in-insider-case/
The articles don’t say if these are naturalized citizens, or if they are not citizens. It’s a real shame that people come to this country, and then use their educations and skills to bypass American SEC rules/regulations/laws in order to enrich themselves.
How many hedge fund managers did not make their profits from insider trading? probably not many!
Living in Palo Alto? You are part of the 1%.
Glass houses my friends.
This must have been the guy i saw pulled over this morning in his red porsche standing with his pants down and wearing boxer briefs with his hands behind his head. Didn’t look like a lot of fun.
By the way toady, believe me, just because somebody lives in palo alto does not qualify them for the top percentile. It’s an upscale town, but let’s not get to carried away. Ever been to Hillsborough or Woodside?
> do you think Doug Whitman is an illegal immigrant?
No. The question was directed at Ms. Khan’s citizenship, as well as Raj Rajaratnam, who was the head of Galleon Group, that was involved in insider trading and shut down in 2009.
Big Al, I know your post wsa removed, but I appreciated the link.
Toady, there are a lot of PA residents who are NOT the 1% or even close. PA has many, many renters, there are those that no matter how hard & long they work don’t even approach the 1%. While it’s home to some famously monied people & quietly monied people, it’s always had residents of varying incomes.
I will happily follow this case to see what happens.