The second trial of Nelson J. Obus, manager of Wynnefield Capital, a New York hedge fund, began this week in a New York City courtroom in connection with insider trading allegations.
Obus was brought to court in a civil trial by the Securities and Exchange Commission (SEC) after he allegedly received inside information that SunSource, which makes nuts and bolts, was to be acquired by Allied Capital Corp.
The SEC sued Obus, Black and Strickland in 2006, but U.S. District Judge George Daniels, who is presiding at the current trial, threw out the prior case in 2010. There were not enough facts “to prove that Strickland had passed illegal inside information,” Bloomberg reported. But a federal appeals court rejected Daniels’ ruling in 2012.
This week, Joel M. Cohen, a lawyer representing Obus, said, ‘‘The SEC’s theory makes no sense.’’