FBI Makes "Slimeball" Wall Street Insider Trading Bust

A portfolio manager allegedly bragged he was engaging in "slimeball" activity.

By Jonathan Dienst and Shimon Prokupecz
|  Tuesday, Feb 28, 2012  |  Updated 1:27 PM EDT
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FBI Makes "Slimeball" Insider Trading Bust

AP

Traders at work on the trading floor of the New York Stock Exchange.

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The FBI has arrested a Wall Street portfolio manager who allegedly bragged he was engaging in “slimeball” activity -- trading on inside information to gain nearly $1 million in illegal profits.

Douglas Whitman, a California executive with Whitman Capital, is accused of illegally trading in three stocks: Marvell Technology, Polycom and Google.

“Whitman recognized the value of the information he got, and paid cash for it in one case,” said FBI New York Director Jan Fedarcyk.

Whitman’s arrest is linked to the Raj Rajaratnam hedge fund investigation, officials said.

His attorney, David L. Anderson, said in a statement that Whitman is "innocent of the insider trading charges that have been brought against him," adding that Whitman "traded on the basis of lawful research and analysis, not unlawfully obtained inside information."

Whitman, 54, is from Atherton, Calif. He is one of more than 60 Wall Street executives and consultants charged in connection with the FBI’s broad insider trading probe.

He is accused of trading on information with consultants Karl Motey and Roomy Kahn, who have both pleaded guilty.

The Securities and Exchange Commission said Whitman is on tape talking to Kahn, warning he would stop speaking to her if she wasn’t going to be a “slimeball” anymore.

The SEC also filed civil charges.

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