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

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note