Barai, Alleged Jiau Tipster Plead Guilty

May 31 2011 | 9:44am ET

Prosecutors netted another pair of guilty pleas before the holiday weekend in their crackdown on expert networks, including that of hedge fund manager Samir Barai.

Barai admitted to using expert networks, specifically Primary Global Research, to obtain confidential information he used in trading. The 39-year-old faces up to 65 years in prison on the securities fraud, wire fraud and conspiracy charges, but is cooperating with the investigation and is likely to receive a reduced sentence.

Hours before Barai entered his plea, Sonny Nguyen, a former senior financial analyst at Nvidia Corp., pleaded guilty to wire fraud and securities fraud, admitting he passed tips about the company to Primary Global analyst Winifred Jiau in exchange for other stock tips.

"Between 2007 and 2008, I agreed with others to engage in an insider-trading scheme," Nguyen told U.S. District Judge Jed Rakoff. Pressed to indentify the others, he named Jiau, who he will testify against, prosecutors said.

Barai also fingered Jiau, admitting that he "understood that Ms. Jiau had gotten the information from a Marvell [Technology Group] employee who was not authorized to discuss it. I understood at the time that my conduct was wrong and unlawful."

Jiau has pleaded not guilty in the case and is set to face trial beginning tomorrow. Prosecutors have secured eight guilty pleas to date, out of 13 individuals charged.

Barai said he conspired with two former SAC Capital Advisors traders, Noah Freeman and Donald Longueuil, both of whom have already pleaded guilty. He also admitted that, after seeing an article in The Wall Street Journal in November about the investigation that eventually snared him, he "contacted my research analyst and directed him to destroy certain electronic and hard copies related to trading activities."

A Barai Capital Management analyst, Jason Pflaum, is among those cooperating with prosecutors after striking a plea deal.


In Depth

In Depth: Are Large Judgments The Next Target for Hedge Funds?

Aug 12 2015 | 3:46pm ET

Hedge funds are no strangers to making investments that are sensitive to litigation...

Lifestyle

Provio Brings Anonymous Interviewing to Wall Street

Aug 12 2015 | 2:44pm ET

Taking a page from social networking and dating websites, a startup technology company...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note