NEWARK– The chief investment officer and portfolio manager of the Clay Capital Fund, a hedge fund based in Summit, was sentenced Monday to 12 months in prison for participating in an insider trading scheme which netted more than $2.5 million in illicit profits, U.S. Attorney Paul J. Fishman announced.
James Turner, 45, of Traverse City, Mich., previously pleaded guilty to securities fraud before U.S. District Judge Dennis M. Cavanaugh.
According to documents filed in this case and statements made in court:
Beginning in 2006, Turner received inside information from his brother-in-law, Scott Vollmar, and from Scott Robarge, Turner’s friend and former college classmate. Vollmar, who was formerly employed as a director of business development at Autodesk Inc., a software company based in California, passed inside information to Turner concerning Autodesk’s confidential negotiations to acquire Moldflow Corp. Turner admitted he used that inside information to purchase more than $7 million worth of Moldflow stock for the Clay Capital Fund and for himself and his family members.
Following the public announcement of Autodesk’s acquisition of Moldflow, Turner sold the Moldflow shares he had bought, realizing illicit profits of more than $1.7 million. Turner admitted he received inside information from Vollmar in advance of the public release of Autodesk’s earnings reports, and that he used this information to trade Autodesk stock, resulting in illicit profits of more than $500,000.
Scott Robarge, who was formerly employed as a recruiting technology manager at Salesforce.com Inc., a software company based in California, passed inside information to Turner concerning Saleforce’s quarterly sales results. Turner admitted he used this inside information to trade Salesforce stock, realizing illicit profits of more than $200,000.
In addition to the prison term, Cavanaugh sentenced Turner to three years of supervised release and fined him $25,000.
Vollmar and Robarge have both previously pleaded guilty and are scheduled to be sentenced on May 14.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael Ward in Newark; postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Philip R. Bartlett; and the U.S. Securities and Exchange Commission’s Chicago Regional Office, under the direction of Merri Jo Gillette, for the investigation leading to today’s plea. He also thanked the SEC Market Abuse Unit, under the direction of Daniel M. Hawke, for its important role in the investigation leading to the sentence.