OSU Professor Blackwell on the hotseat
In case you haven't heard about Professor Roger Blackwell, the well-respected former executive of Worthington Foods, turned B-school guru, then you might want to read-up. The Columbus Dispatch has a decent explanation of the case to date, of which I excerpt:
BLACKWELL TRIAL NEARS AN END
Prosecution, defense offer closing arguments in insider-trading case
Published: Wednesday, June 15, 2005
...
With closing arguments in the month-long trial expected to end today, the fate of the 64-year-old author and former Worthington Foods director will be in the hands of 12 jurors.
...
Yesterday, they heard from both sides: prosecutors who said Blackwell was at the epicenter of a 14-person conspiracy to buy stock with inside information, and defense lawyers who said Blackwell didn't tip off anyone to the 1999 acquisition of Worthington by Kellogg Co.
Assistant U.S. Attorney Michael Marous said Blackwell told friends and relatives -- including his father Dale, son Christian and former in-laws Alfred and Gertrude Stephan -- to buy Worthington stock in the weeks before the merger was announced Oct. 1, 1999.
He said the result was a "feeding frenzy'' of illegal buying that produced nearly $1 million for the defendants and others who have not been charged.
A year later, after being asked for information by government regulators reviewing the trades, Blackwell and former wife Kristina Stephan deleted names of people they tipped off from office computer records, Marous said.
"Roger Blackwell knew he was under investigation,'' the prosecutor said from an oak podium placed 20 feet from jurors. "This destruction of evidence is direct evidence of the conspiracy and . . . direct evidence of the guilt of Roger Blackwell.''
Marous said that longtime friend Justin Voss, also a college professor, was among those with whom Blackwell shared inside information. In the three months before the merger was announced, Voss became the largest individual buyer of Worthington Foods stock in the country.
...
In addition to Voss, the government says Blackwell gave inside information to Kelley L. Hughes, 41, of Columbus, the office manager for Roger Blackwell Associates; Kevin L. Stacy, 43, of Columbus, who is married to Hughes; Arnold L. Jack, 66, of Upper Arlington, Blackwell's attorney and a business partner; and Black Jack Enterprises, a partnership created by Blackwell and Jack. Together they face 48 counts of insider trading and conspiracy.
Later in the day, Blackwell's attorney, Thomas O. Gorman, disputed much of what Marous had said.
Gorman called Blackwell a self-made man who grew up on a farm and worked his way through school on the way to becoming an OSU professor, author and business consultant "to companies around the world who have trusted him with some of their most sensitive information.''
Gorman accused Blackwell's ex-wife of telling her parents, a cousin and others to buy Worthington Foods stock.
"Roger Blackwell never took shortcuts,'' Gorman said. "Insider trading is cheating. It's not what the man is about.''
Gorman said defendants Voss and Jack were sophisticated investors who bought stock because they determined the shares were undervalued. Jack's attorney, Tom Tyack, played a September 1999 recording of a conversation between Jack and his stock broker, who said she rated the stock a "buy.''
"Standing between Roger Blackwell and these allegations are you,'' Gorman told the jury. "You are the last bastion of freedom because you can stop this.''
Blackwell faces up to 10 years in prison and a $1 million fine if convicted.
BLACKWELL TRIAL NEARS AN END
Prosecution, defense offer closing arguments in insider-trading case
Published: Wednesday, June 15, 2005
...
With closing arguments in the month-long trial expected to end today, the fate of the 64-year-old author and former Worthington Foods director will be in the hands of 12 jurors.
...
Yesterday, they heard from both sides: prosecutors who said Blackwell was at the epicenter of a 14-person conspiracy to buy stock with inside information, and defense lawyers who said Blackwell didn't tip off anyone to the 1999 acquisition of Worthington by Kellogg Co.
Assistant U.S. Attorney Michael Marous said Blackwell told friends and relatives -- including his father Dale, son Christian and former in-laws Alfred and Gertrude Stephan -- to buy Worthington stock in the weeks before the merger was announced Oct. 1, 1999.
He said the result was a "feeding frenzy'' of illegal buying that produced nearly $1 million for the defendants and others who have not been charged.
A year later, after being asked for information by government regulators reviewing the trades, Blackwell and former wife Kristina Stephan deleted names of people they tipped off from office computer records, Marous said.
"Roger Blackwell knew he was under investigation,'' the prosecutor said from an oak podium placed 20 feet from jurors. "This destruction of evidence is direct evidence of the conspiracy and . . . direct evidence of the guilt of Roger Blackwell.''
Marous said that longtime friend Justin Voss, also a college professor, was among those with whom Blackwell shared inside information. In the three months before the merger was announced, Voss became the largest individual buyer of Worthington Foods stock in the country.
...
In addition to Voss, the government says Blackwell gave inside information to Kelley L. Hughes, 41, of Columbus, the office manager for Roger Blackwell Associates; Kevin L. Stacy, 43, of Columbus, who is married to Hughes; Arnold L. Jack, 66, of Upper Arlington, Blackwell's attorney and a business partner; and Black Jack Enterprises, a partnership created by Blackwell and Jack. Together they face 48 counts of insider trading and conspiracy.
Later in the day, Blackwell's attorney, Thomas O. Gorman, disputed much of what Marous had said.
Gorman called Blackwell a self-made man who grew up on a farm and worked his way through school on the way to becoming an OSU professor, author and business consultant "to companies around the world who have trusted him with some of their most sensitive information.''
Gorman accused Blackwell's ex-wife of telling her parents, a cousin and others to buy Worthington Foods stock.
"Roger Blackwell never took shortcuts,'' Gorman said. "Insider trading is cheating. It's not what the man is about.''
Gorman said defendants Voss and Jack were sophisticated investors who bought stock because they determined the shares were undervalued. Jack's attorney, Tom Tyack, played a September 1999 recording of a conversation between Jack and his stock broker, who said she rated the stock a "buy.''
"Standing between Roger Blackwell and these allegations are you,'' Gorman told the jury. "You are the last bastion of freedom because you can stop this.''
Blackwell faces up to 10 years in prison and a $1 million fine if convicted.
posted by RKS at 4:22 AM
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