New York (Hedge Co.net) – Hedge fund manager Douglas Whitman and his California-based firm have been charged by the SEC with illegally profiting from insider tips on Google and Polycom, making $980,000 in the process.
The SEC alleges in a complaint dated February 10, that Whitman and Whitman Capital obtained insider information on Google and Polycom from an individual investor named Roomy Khan. The two conducted their business on Skype to avoid detection, the SEC said. Whitman Capital hedge funds reaped approximately $980,000 in ill-gotten profits.
In addition to tipping Whitman, the SEC says that Khan also passed the material nonpublic information that she obtained concerning Polycom and Google to investment professionals at other hedge fund advisers, including Raj Rajaratnam of Galleon Management LP., and Jeffrey Yokuty and Robert Feinblatt of Trivium Capital Management LLC. Like Whitman and Whitman Capital, both Galleon and Trivium used this information to reap sizable profits for the hedge funds they managed.
The SEC seeks permanent injunctions against each of the defendants, enjoining them from engaging in the transactions, acts, practices, and courses of business alleged in the SEC complaint; disgorgement of ill-gotten gains or losses avoided from the unlawful insider trading activity, together with prejudgment interest and civil penalties.
Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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