CIO of Clay Capital Management Guilty of Insider Trading

Posted by Chris Morales on Mon, Dec 26, 2011 @ 03:57 AM

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James Turner (44), the Chief Investment Officer of Clay Capital Management, a hedge fund, pleaded guilty to charges of insider trading. Prosecutors claim that the scheme generated illegal profits upwards of $2.5 million.

Turner testified at Federal Court in Newark, New Jersey that he had illegally traded shares of Moldflow Corp, Autodesk Inc and Inc based on information that he gathered from his brother-in-law, Scott Vollmar, the Director for Business Development for Autodesk Inc. He also confessed to receiving illicit information from a manager, Scott Robarge.

According to Turner’s confession, Vollmar shared confidential information concerning Autodesk’s acquisition of Moldflow. When the company announced its intention to buy Moldflow, Turner sold his shares in the company and made a profit of $650,000 for the hedge fund. He also took home $1.1 million for himself. In addition to this, James admitted to generating profits from wagering that the shares in Autodesk would fall in value in 2008. He had received information from Vollmar that predicted this.

His association with Robarge helped him make a $224,000 profit. Robarge told him that would surpass the estimated earnings for its quarter that ended in January 2008.

What Does Insider Trading Entail?

A person is considered guilty of insider trading when he or she has insider knowledge of a company and uses this to buy and sell stock. These people use their status as insiders for personal gain, which is illegal. Insider trading also encompasses ‘tipping’. This is when people trade information that is not intended for the eyes of the public, to others for a profit. The buyers of the information also use their newfound knowledge to further their personal profits. Most insider trading occurs in institutions that deal with sensitive information. For example: broker firms and banks.

Those accused of insider trading, if convicted, can face a fine of up to $1 million. Otherwise, they can be asked to pay three times the amount they profited by. Some courts sentence offenders to jail time. The circumstances of the case are taken into consideration when determining the duration of imprisonment.  

To find out more about Bay Area White Collar Crime Lawyers, contact us to make an appointment with Mr. Morales, a San Francisco Felony Defense Attorney.


Tags: felony, white collar crime, insider trading