Prosecutors Release New Information About Insider Trading Probe, Barai and Others

Federal prosecutors have released new information concerning the insider trading investigation which has resulted in 49 arrests and 29 guilty please. Prosecutors unsealed the transcript of Noah Freeman’s plea hearing on Monday. Freeman, who lives in Massachusetts has plead guilty to insider trading charges and has been cooperating with federal authorities to obtain information to help their case. He worked for SAC, the Stamford Conn. hedge fund which benefitted from many of the trades based on the inside information. In the transcript, Freeman said:
“Some of the people with whom I—from whom I received information were based in other states, including California, New York and Texas, and others were abroad including in Taiwan,” Freeman told a federal judge. The locations seem to match those of several people indicted in the case; Winifred Jiau, a former consultant for expert-networking firm Primary Global Research, is a Taiwanese citizen, while Barai and Longueuil, who prosecutors allege traded information with Freeman, were both based in New York. Primary Global itself is based in California, and Mark Longoria, another former Primary Global consultant charged in the case, worked for Advanced Micro Devices in Texas.
Freeman also admitted that he paid for tips and “shared the information I received with others and I received similar information from them.” In another transcript, unsealed yesterday, Citigroup’s Tribeca Global Management earned more than$450,000 in illicit profits from the trades of hedge fund owner and Harvard Business School Alumni Sam Barai. Barai worked at Tribeca then before starting Barai Capital Management. He traded on confidential information about chipmaker Fairchild during and after his tenure at Tribeca. In a related occurence today, U.S. District Court Judge Richard Holwell postponed the start date of the one time billionaire Galleon hedge fund foounder Raj Rahartnam who has been charged with insider trading. The trial will start March 8. Two dozen people have been charged criminally in the network of hedge fund managers and 19 have pleaded guilty. The Galleon Fund was wound down after the government charged Rajaratnam with using confidential information to gain an unfair advantage in trading technology company stocks.