The chief investment officer and portfolio manager of a Summit-based hedge fund was sentenced yesterday to a year in prison for his role in an insider trading scheme that authorities say netted him more than $2.5 million in illegal profits.
James Turner, 45, was sentenced in Newark federal court after having previously pled guilty to a charge of securities fraud. He also was fined $25,000, said U.S. Attorney Paul Fishman.
Turner, who helped run Clay Capital Management from 2006 to 2010, on several instances traded on insider information passed to him from his brother-in-law, Scott Vollmar, and a friend and former college classmate, Scott Robarge.
The illegal trading took place in early 2008. Vollmar, then director of business development for design software maker Autodesk, tipped Turner about an acquisition that Autodesk was working on for software maker Moldflow Corp., according to a related SEC complaint.
Turner, of Traverse City, Mich., traded on the tip in his personal accounts, his family members’ accounts and his hedge fund’s account, the SEC said. He also tipped Robarge about the acquisition and encouraged friends to buy Moldflow stock, the agency said.
Vollmar also passed non-public information to Turner in February 2008 about Autodesk’s financials ahead of a quarterly earnings report, which Turner traded on and subsequently passed to Robarge, the SEC said. Robarge, then a recruiting technology manager at Salesforce.com, returned the favor by tipping Turner non-public data about his company’s 2008 quarterly earnings.
All told, the insider scheme netted about $3.9 million in illicit profits between at least four people, the SEC said in its civil suit, filed in August. Clay Capital Management liquidated its fund and returned assets to investors in December 2010, the agency said.
Vollmar and Robarge previously pleaded guilty and are scheduled to be sentenced next month, Fishman said. An attorney for Turner, Joseph Bush of Muskegon, Mich., did not return a call. The SEC’s case against Clay Capital, Turner and others remains underway.