Tuesday, 22 July 2014
Last updated 2 hours ago
Jun 6 2011 | 10:00am ET
Testimony in the Winifred Jiau insider-trading trial opened with a bang, as former SAC Capital Advisors portfolio manager Noah Freeman admitted to regularly trading on confidential information at the hedge fund giant and another hedge fund, with much of that information coming from Jiau.
Freeman, who has pleaded guilty in the case and is cooperating with prosecutors, said he engaged in insider-trading at SAC, where he worked from 2008 through 2010, "a number of times." But he honed the practice at Sonar Capital Management, the Boston-based hedge fund where he worked for three years before joining SAC, he testified on Friday.
Insider-trading "was a regularly-employed part of our business model" at Sonar, Freeman said, adding that he personally made between $20 million and $30 million for the hedge fund trading on confidential tips. About $10 million of those ill-gotten gains came on tips from Jiau, who Freeman met while working at Sonar.
Freeman testified that he met Jiau, a consultant for Primary Global Research, eight times between 2006 and 2008 and spoke "regularly" with her by phone, conversations he described as "extremely helpful."
"She provided us with the complete financials" of two technology companies, Freeman told the jury, which saw a member excused and replaced with an alternate before Freeman's testimony began. "We caused her to be paid."
A lawyer for Sonar founder Neil Druker denied Freeman's allegations, calling "any statement that Sonar Capital used insider trading as a business model" "categorically false" and referring to Freeman as a "rogue" former employee who "violated Sonar's strict and robust policies against trading on the basis of insider information."
Freeman said during his time on the stand that he had implicated "more than a dozen" people during his cooperation with prosecutors, which began when he was approached by the Federal Bureau of Investigation late last year. His testimony will resume on Monday.
Freeman is the first of three cooperating witnesses prosecutors plan to call. Jiau's lawyer, Joanna Hendon, has said she'll call one of her own, Barai Capital Management's Samir Barai, who has implicated her client.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…