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U.S. Supreme Court rejects Whitman Capital founder's appeal

Published 10/11/2014, 15:04
Updated 10/11/2014, 15:10
© Reuters Douglas Whitman is pictured sitting in the Manhattan Federal Courthouse in New York during his sentencing in this court sketch.
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By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday left intact California hedge fund manager Douglas Whitman's conviction for insider trading relating to two trading schemes from 2006 to 2009.

The high court let stand a February decision by the 2nd U.S. Circuit Court of Appeals that rejected Whitman's arguments that his conviction was tainted because the trial judge instructed jurors improperly and refused to admit certain testimony from experts and witnesses.

Justice Antonin Scalia wrote a brief opinion, joined by Justice Clarence Thomas, saying that although he agreed that the court should not hear Whitman's case, the legal issue - whether courts have to deter to the prosecution's interpretation of a criminal law - was one the court should take up in the future.

Whitman, the founder of Whitman Capital LLC in Menlo Park, California, was sentenced in January 2013 to two years in prison on two counts each of securities fraud and conspiracy for his roles in the two trading schemes.

Prosecutors said one scheme led to more than $900,000 (566,996.21 pounds) of illegal profit from trading the shares of Google Inc (O:GOOGL) and video-conferencing company Polycom Inc (O:PLCM), and the other involved "soft-dollar" payments made to win tips on and then trade in chipmaker Marvell Technology Group Ltd (O:MRVL).

The prosecution said Whitman tried to profit illegally with information from insiders including Roomy Khan, a former Intel Corp employee who passed tips on Google and Polycom, and Karl Motey, a consultant who passed tips about Marvell.

© Reuters. Douglas Whitman is pictured sitting in the Manhattan Federal Courthouse in New York during his sentencing in this court sketch.

(Additional reporting by Jonathan Stempel; Editing by Will Dunham)

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