UPDATE: Two Ex-SAC Fund Managers Charged In Insider-Trading Case

Feb 8 2011 | 10:46am ET

Noah Freeman and Donald Longueuil, former portfolio managers at SAC Capital Advisors, are among the four hedge fund employees charged with insider-trading in the Justice Department's massive investigation.

Freeman, who left the hedge fund giant early last year, is cooperating with prosecutors and has pleaded guilty. According to the complaint against him, Freeman "obtained material non-public information from certain co-conspirators who worked at publicly traded companies or hedge funds, for the purpose of extracting profitable trades on the basis of the inside-information."

Longueuil, who worked at SAC's CR Intrinsic division, was arrested this morning at his Manhattan home.

The others charged in the case are Barai Capital Management's Samir Barai and Jason Pflaum. Like Freeman, Pflaum, a former technology analyst at Barai Capital, has struck a plea deal and is cooperating in the investigation.

Barai surrendered to authorities this morning. He and Longueuil are likely the two people facing obstruction of justice charges, although that will be announced at noon by federal prosecutors and the Securities and Exchange Commission.

The four people are the first to be charged in the case who are neither employees nor former consultants for expert-network firm Primary Global Research.

Barai Capital is one of four hedge funds raided by the Federal Bureau of Investigation in November. It was the first to receive such an unwelcome visit and the last to be identified. The Wall Street Journal first reported that the unnamed co-conspirator and cooperating witness identified in the case against Primary Global analyst Winifred Jiau were Barai and Pflaum, respectively.

According to that indictment, Barai "communicated directly" with Jiau, conversations which Pflaum frequently listened to. The hedge fund allegedly earned some $820,000 trading on confidential information.

Barai Capital, which managed less than $100 million, is liquidating, one of its seeders, Protégé Partners, told investors last month

Freeman joined SAC's then-new Boston office in 2008 from Sonar Capital Management. Previous to that, he'd worked at Bain Capital's Brookside Capital hedge fund, which he left in 2004.

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