Manager With Summit Hedge Fund Guilty In Scheme

A manager and chief investment officer at Clay Capital Fund based in Summit pleaded guilty today to participating in a $2.5 million insider-trading scheme.

James F. Turner II, 44, told a Newark federal court judge that he participated in securities fraud by using inside information to purchase $7 million worth of Moldflow stock for the Clay Capital Fund and for himself and his family members, according to a Department of Justice press release.

According to the documents, "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's inside information came from his brother-in-law, Scott Vollmar, and Scott Robarge; Turner and Robarge have been friends since they were in college together. Vollmar worked at the California-based software firm Autodesk Inc. and passed the confidential information about the aquisition of Moldflow Corp. Robarge and Vollmar have already pleaded guilty and are awaiting sentencing.

Court documents say that Turner admitted Vollmar passed him information ahead of Autodesk’s public earnings reports. Turner used that knowledge to illegally net $500,000 from a stock trade. 

Robarge, formerly with California-based Salesforce.com Inc. tipped Turner off about that company's quarterly sales results. "Turner admitted he used this inside information to trade Salesforce stock, realizing illicit profits of more than $200,000," according to court documents.

Turner was released on $300,000 bail, and faces a maximum of 20 years in prison and a $5-million fine. He'll be sentenced April 16 in Newark.