Thursday, 24 July 2014
Last updated 8 hours ago
Mar 15 2013 | 12:39am ET
A federal judge showed mercy to an expert-networker who pleaded guilty to passing tips to hedge fund managers, sentencing him to just over a year in prison—when he faced almost five.
U.S. District Judge Naomi Reice Buchwald’s sentence of Tai Nguyen wasn’t just less than the at least three years and 10 months sought by prosecutors. It was less than the two-and-a-half years recommended by probation officials.
Nguyen pleaded guilty to conspiracy in July, admitted he tipped Barai Capital Management founder Samir Barai and former SAC Capital Advisors analyst Noah Freeman about medical and veterinary device-maker Abaxis. Nguyen ran his own equity research firm, Insight Research, and was a consultant for expert-network Primary Global Research, which was at the center of the government's recent crackdown on insider-trading.
Nguyen’s lawyers sought leniency for the Californian, noting that he came to the U.S. as a Vietnamese refugee, that he poses no danger to the public and that his crimes have had a serious impact on his family—his sister and source of information about Abaxis lost her job when he was arrested.
“The law teaches to impose a sentence which is sufficient, but not greater than necessary,” Reice Buchwald said before ordering Nguyen to serve one year and one day in prison. “Apart from the history of the life of Mr. Nguyen, I accept his sincere remorse for the unusually severe consequences that his crime caused his family, and here it is an extended family bearing the consequences.”
An apologetic Nguyen sought to explain his crimes.
“When I lost my job, my best customers were Sam and Noah,” he said. “They were always asking me for the best information. I was wrong. Sam and Noah made money on my recommendations in the past. But they were not satisfied. They wanted an edge.”
Prosecutors were not impressed. “The defendant’s sister was in a position to get extremely good information about Abaxis and provide it to Noah Freeman and Samir Barai for a period of years, and which resulted in a significant windfall for them,” Assistant U.S. Attorney David Miller said, to no avail. “This was not aberrant behavior, this took place over a long period of time. This was not a one-off.”
Reice Buchwald ordered Nguyen to report to prison by May 1.
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…