Insider trading case in US: Indian-origin man charged

Posted By: Pti
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New York, Feb 9 (PTI) US prosecutors have charged SamirBarai, an Indian-origin former hedge fund manager atCitigroup, with conspiracy to commit securities and wire fraudas part of a wide-ranging investigation into the country''sbiggest insider trading case.

39-year-old Barai, also founder of New York-based USD 100million Barai Capital Management, surrendered to the FBIyesterday.

He has been charged with conspiracy to commit securitiesand wire fraud for his involvement in insider trading.

Three others charged along with him by prosecutors in NewYork are Donald Longueuil, who formerly worked as a researchanalyst, Ason Pflaum, a former research analyst for Barai andNoah Freeman, a portfolio manager at a fund.

Barai and Longueuil, 34, have also been charged withobstruction of justice for their efforts to destroy evidenceof their involvement in insider trading after reading mediareports about the FBI''s investigation.

The charges are the latest in the US government''s biggestinsider trading probe. So far, 13 people have been arrestedor charged in the investigation.

Barai is accused of trading on inside information abouttechnology companies after receiving tips from a consultantworking for expert network firm Primary Global Research.

Barai Capital was one of the hedge funds raided by USinvestigators in November. It has since shut down.

Prior to starting his own fund, Barai was a portfoliomanager at Citigroup''s USD 2 billion Tribeca GlobalManagement, which was shut in 2008.

Longueuil was arrested at his residence in New Yorkyesterday morning.

Pflaum and Freeman have pleaded guilty in Manhattanfederal court to one count each of conspiracy to commitsecurities fraud and for their roles in the scheme.

Freeman was a managing director at Boston-based SonarCapital Management before joining SAC Capital in mid-2008.

The US has brought insider-trading charges against morethan 30 people since October 2009 as part of the probe.

A trial in the case at the centre of the investigation,against former Galleon Group LLC co-founder Raj Rajaratnam, aSri Lankan, is scheduled to begin on February 28 in New York.

The complaint unsealed yesterday alleged hard coreinsider trading in stock after stock - people blatantlytrafficking in material, non-public information.

"And the lengths to which two of these defendants wentto cover their tracks sounds like something out of a badmovie," Manhattan US Attorney Preet Bharara said in astatement.

According to the complaint, Barai, Longueuil, Pflaum andFreeman participated in a conspiracy between 2006 and 2010 toobtain inside information, including detailed financialearnings about numerous public companies. (More) PTI YAS

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