California Dreaming, No More Hedge Fund Surfing, Guilty of Insider Trading
The last sunset . . . and it wasn’t sung by The Beachboys.
Doug Whitman was found guilty of 2 counts of conspiracy and 2 counts of securities fraud in court in New York City.
Preet Bharara, U.S. Attorney – sometimes affectionately known as “the Sherriff of Wall Street“ – made this announcement: The 54-year old Mr. Whitman, portfolio manager at Whitman Capital LLC, was convicted after a 3-week trial.
Mr. Whitman, a California native, is scheduled to be sentenced on December 20, 2012.
To break it down: Each conspiracy count has a possible maximum prison sentence of 5 years. And each securities fraud count carries a possible maximum prison sentence of 20 years.
But it doesn’t end here: Each conspiracy count has a hefty fine of $250,000 – or two times the profit or loss resulting from illegal activity, whichever is assessed as being greater. Each securities fraud count carries a fine of $5 million.
The insider trading schemes netted Mr. Whitman’s firm more than $900,000 illegally. The schemes ran from 2006-2009. He executed trades involving 3 companies – Marvel Technology Group, Polycom, and Google. These trades were done using “inside” information the average person wouldn’t have a clue about.
“Mr. Whitman had a hedge fund . . . with rules against insider trading. He flouted those rules . . . and is now a convicted felon facing imprisonment.
The rules do apply.”
No more good vibrations for Mr. Whitman, shooting the tube to whatever the judge hands down in December. . . .