Menlo Park hedge fund operator indicted

The president of a Menlo Park hedge fund Friday became the latest figure to be indicted in the Galleon insider trading scandal that has stretched from Silicon Valley to Wall Street.

Doug Whitman, 54, of Whitman Capital, appeared before a U.S. magistrate in New York and entered a plea of not guilty to a federal indictment for securities fraud and conspiracy involving trades in shares of Google (GOOG), Polycom and Marvell Technology Group that allegedly netted his company almost $1 million. He was released on a $1.5 million bond secured by a $500,000 cash deposit.

He also faces insider trading charges by the Securities Exchange Commission.

Whitman’s lawyer, Bill McBride of New York, issued a statement saying his client is innocent and has cooperated with authorities. He had traded on the basis of “lawful research and analysis” and did not pay insiders for any information, McBride said.

A federal grand jury indictment and parallel SEC complaint portray Whitman as cajoling a friend, Roomy Khan, for advance tips on Google and Polycom quarterly revenue announcements, starting in 2006.

Source: Mercury news