Wednesday, 23 July 2014
Last updated 4 hours ago
Apr 29 2011 | 1:24pm ET
Former SAC Capital Advisors portfolio manager Donald Longueuil pleaded guilty yesterday to insider-trading, implicating another hedge fund manager in the process.
Longueuil told U.S. District Judge Jed Rakoff that he traded on confidential information he received from Barai Capital Management's Samir Barai. He pleaded guilty to a count each of securities fraud and conspiracy.
But the former CR Intrinsic manager was spared the obstruction of justice charge. Prosecutors say that Longueuil sought to destroy records and evidence of his misdeeds after Barai Capital was raided by the Federal Bureau of Investigation in November. In the complaint against him, prosecutors quoted from several taped conversations between Longueuil and fellow SAC veteran Noah Freeman, who was cooperating with investigators and recording the phone calls.
"The night that Wall Street Journal article came out… I pressed the eject button and everything's fucking gone," Longueuil told Freeman. Longueuil later described how he took a "20 block walk around" the Upper East Side of Manhattan tossing pieces of his "chopped up" hard drives into different garbage trucks.
"I am sorry for my actions, and for the pain I caused my family and loved ones," Longueuil said. "I have learned a lot from my experience, and I look forward to applying these lessons as I move forward with my life."
Barai himself is in plea talks with prosecutors, telling them earlier this month that he received the information from Winifred Jiau, a consultant for expert-network firm Primary Global Research. Barai said he paid Jiau, who has pleaded not guilty, as much as $10,000 per month for the tips.
Longueuil's courtroom identification of Barai produced a startling moment. Before his client answered Rakoff's question about Barai, Longueuil's lawyer, Craig Carpineto, rose to speak.
"Sit down, counsel!" Rakoff, who is not known for pulling his punches, told Carpineto sharply.
Longueuil faces up to four years and 9 months in prison when he is sentenced on July 29. He also agreed to forfeit $1.25 million. Longueuil is one of a dozen people charged in the Justice Department's wide-ranging insider-trading case, and the fifth to plead guilty.
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