April 20, 2024

DealBook: Guilty Plea Expected in Hedge Fund Case

11:46 a.m. | Updated
Samir Barai, a former Citigroup executive who ran Barai Capital Management, is expected to plead guilty on Friday afternoon to insider trading before a magistrate at the Federal District Court in Manhattan, a person briefed on the matter told DealBook.

The government charged Mr. Barai in February with swapping illegal stock tips with two portfolio managers at SAC Capital, the hedge fund run by the billionaire investor Steven A. Cohen. The two SAC managers, Noah Freeman and Donald Longueuil, have already pleaded guilty. A fourth person, Jason Pflaum, an employee of Mr. Barai’s, has also pleaded guilty.

When Mr. Longueuil pleaded guilty last month, he said that he had bought shares in Marvell Technology Group after receiving a tip about the chipmaker’s financial information from Mr. Barai.

Evan Barr, a lawyer for Mr. Barai, declined to comment. A spokeswoman for the United States attorney in Manhattan declined to comment.

The case is connected to the government’s investigation of expert-network firms that facilitate meetings between money managers and industry experts, including employees of public companies. A number of consultants at Primary Global Research, an expert-network firm at the center of the government’s investigation, have already pleaded guilty to providing traders with confidential information about publicly traded companies.

“Given the scope of the allegations to date, we are not talking simply about the occasional corrupt individual,” said Preet Bharara, the United States attorney in Manhattan, at an earlier news conference discussing expert-network firms. “We are talking about something verging on a corrupt business model.”

Mr. Barai, 39, was a former client of Primary Global. He has been cooperating with federal prosecutors and providing them with information about his illegal trading, according to court filings. The government has charged him with trading on secret corporate information provided to him by Winifred Jiau, a consultant at Primary Global.

Ms. Jiau, who has pleaded not guilty, is scheduled to go to trial on Wednesday.

Also Friday, Sonny Nguyen, a former employee at Nvidia, a graphics chipmaker, is expected to plead guilty to providing Ms. Jiau with confidential information about his company. He is expected to testify at Ms. Jiau’s trial.

Mr. Nguyen’s lawyer could not immediately be identified.

“Nvidia placed Mr. Nguyen on administrative leave immediately upon our being informed of his intent to plead guilty, and he has now resigned,” said the company in a statement provided to DealBook. “This was a clear violation of law and our company policies. We continue to cooperate fully with the New York U.S. attorney’s office and the F.B.I.”

Article source: http://feeds.nytimes.com/click.phdo?i=68d44187a992553cbc84f1c3ccf9f7ff

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