Monday, 3 August 2015
Last updated 2 days ago
Feb 1 2011 | 5:22am ET
Barai Capital Management, the hedge fund whose founder has been identified as an alleged co-conspirator of accused insider-trader Winifred Jiau, is closing its doors.
The New York-based firm is cooperating with the investigation, which has led to at least eight arrests since November, one of its early backers said. Among those charged was Jason Pflaum, an analyst at Barai, who pleaded guilty to conspiracy and securities fraud.
“BCM has informed us that they are cooperating fully with the government’s investigation,” Jeff Tarrant and Ted Seides, co-founders of Protégé Partners, wrote to investors yesterday. “The firm has also informed its investors that it commenced an orderly wind-down of the BCM funds.”
Barai was identified as “Hedge Fund A” in the complaint against Jiau, a former consultant for expert-network firm Primary Global Research. The firm’s Manhattan offices were raided by the Federal Bureau of Investigation in mid-December, about a week before three more highly-publicized raids at other hedge funds. The agents seized some computers and tape recorders from Barai Capital; firm founder Samir Barai has a hearing disorder and frequently recorded conversations, including with Jiau.
Pflaum was identified as a cooperating witness in that complaint, while Barai is the unnamed co-conspirator called “CC-1” in the complaint, The Wall Street Journal reported yesterday.
Barai has not been accused of any wrongdoing, but the Jiau complaint said that Barai “communicated directly” with “some individuals… in order to receive inside information.” The complaint alleges that he earned some $820,000 trading on tips provided by Barai.
Barai Capital managed less than $100 million as of last fall, despite returning 13% since its inception in 2008. Protégé seeded the firm.
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…