As part of a continuing crackdown, federal prosecutors are charging four hedge fund employees–three portfolio managers and an analyst–with insider trading. Former SAC Capital Advisors portfolio managers Noah Freeman and Donald Longueuil are being charged, as well as Barai Capital’s Samir Barai. FINAlternatives has more:
According to the complaint against him, Freeman “obtained material non-public information from certain co-conspirators who worked at publicly traded companies or hedge funds, for the purpose of extracting profitable trades on the basis of the inside-information.”
Barai Capital is one of four hedge funds raided by the Federal Bureau of Investigation in November. It was the first to receive such an unwelcome visit and the last to be identified. The Wall Street Journal first reported that the unnamed co-conspirator and cooperating witness identified in the case against Primary Global analyst Winifred Jiau were Barai and Pflaum, respectively.
According to that indictment, Barai “communicated directly” with Jiau, conversations which Pflaum frequently listened to. The hedge fund allegedly earned some $820,000 trading on confidential information. Barai Capital, which managed less than $100 million, is liquidating, one of its seeders, Protégé Partners, told investors last month.
This is the latest development in a widespread probe that has so far implicated an ex-Intel executive, an ex-IBM executive, a former Flextronics manager, a McKinsey director, a Morgan Stanley director, and America’s 236th richest man, former Galleon Group hedge fund tycoon Raj Rajaratnam. Lucrative trades included Flextronics, Omnivision, and Apple stock. Head count so far: 35 individuals; 22 have pleaded guilty.