Saturday, 13 February 2016
Last updated 15 hours ago
Jun 17 2011 | 8:41am ET
The third major hedge fund insider-trading trial of the year drew to a close yesterday, with the defendant hoping for a better outcome than that of her predecessors.
Winifred Jiau's lawyer told jurors during her closing statement that the case against the former Primary Global Research consultant, accused of selling tips to two hedge fund managers, was "wall-papered, plastered with reasonable doubt."
"If Ms. Jiau's information was somehow the golden ticket, we wouldn't have the reams and reams of information from other sources," Hendon argued. "There's no evidence" that Noah Freeman, a former SAC Capital Advisors trader who testified that Jiau passed him tips, "ever took her information seriously enough to make a single trade of stock."
Hendon focused on evidence that Freeman and Samir Barai, another hedge fund manager allegedly tipped off by Jiau for money, looked down on Jiau.
"They thought she was crazy," Hendon said. "Then they come into court two years later, and they tell you she was their most critical source of information and that she's in the center of their insider-trading scheme."
That's exactly where Jiau was, prosecutor Avi Weitzman told jurors earlier yesterday.
"This was a brazen insider-trading scheme, and at the heart of it was Winifred Jiau," he said. "Just like her hedge fund clients, she did it for the money." Weitzman said Jiau earned more than $200,000 selling confidential information—frequently raising the price, citing her sources' need for more money, and then failing to pass on the premiums.
Jiau, who is charged with securities fraud and conspiracy, faces up to 25 years in prison if convicted. She is the first of the 13 people charged in the Justice Department's expert-network crackdown to face trial; eight of the 13 have pleaded guilty. Two other insider-trading trials this year, that of Galleon Group founder Rajaratnam and another of three other former hedge fund traders, resulted in guilty verdicts.
Weitzman argued that Jiau's coded instant messages—referring to sources as "cooks," tips as "recipes" and money as "sugar"—"showed she knew what she was doing was wrong."
Prosecutors are to present a rebuttal summation this morning. The jury is expected to begin deliberations later today.