Whitman Capital Founder’s Case Won’t Move to California

The insider-trading case against Doug Whitman, the founder of Whitman Capital LLC, won’t be transferred to California, a judge ruled in New York.

U.S. District Judge Jed Rakoff denied Whitman’s request to move the criminal prosecution, citing his familiarity with the issues in the case and the likelihood that a transfer would significantly delay a trial scheduled to begin July 30.

“I think that there is no basis on which I could properly exercise my discretion and grant the motion,” Rakoff said at a hearing in Manhattan federal court today.

Whitman, 54, is charged with using illegal tips on Google Inc. (GOOG), Polycom Inc. (PLCM) and Marvell Technology Group Ltd. to make more than $900,000 for the hedge fund, according to an indictment filed Feb. 10. He is charged with two counts of conspiracy to commit securities fraud and two counts of securities fraud.

If convicted, Whitman faces as long as five years in prison on each conspiracy charge and 20 years on each securities fraud charge. Whitman, who lives in Atherton, California, pleaded not guilty and is free on $1.5 million bond.

Prosecutors claim Whitman traded on information he got from Roomy Khan, a former Intel Corp. executive who was Whitman’s neighbor, and Karl Motey, an independent consultant. Both have pleaded guilty and are expected to testify against Whitman.

The criminal case is U.S. v. Whitman, 12-CR-00125, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net