Indian American charged in US insider trading
By Arun Kumar, IANSTuesday, February 8, 2011
NEW YORK - Intensifying a crackdown on alleged insider trading by hedge funds, US prosecutors have brought criminal charges against Samir Barai, an Indian-American hedge fund portfolio manager and three others.
Barai and Donald Longueuil, a former manager at hedge fund operator SAC Capital Advisors, were accused of insider trading by federal prosecutors here Tuesday as two other men pleaded guilty to related charges.
In addition, prosecutors said Jason Pflaum, a former research analyst at Barai’s firm, and Noah Freeman, who worked at SAC Capital, had pleaded guilty to one count each of conspiracy to commit securities fraud.
The US has brought insider-trading charges against more than 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 Sri Lankan-American Raj Rajaratnam, is scheduled to begin Feb 28 in New York. He denies wrongdoing.
The actions in federal court in New York are the latest in a widening investigation by a special hedge fund task force created by the Securities and Exchange Commission to stem financial crimes.
The new allegations and guilty pleas, US Attorney Preet Bharara in Manhattan said, are “a sad chronicle not only of criminal conduct but also its brazen coverup.
“And the lengths to which two of these defendants went to cover their tracks sounds like something out of a bad movie.”
Twelve people have been charged by Bharara’s office on suspicion of illegally sharing non-public information about companies to obtain an unfair trading advantage. Four have pleaded guilty, Bharara said, “but we are far from finished.”
Barai, 39, and Longueuil, 34, both of New York, were each charged with one count of conspiracy to commit securities fraud and wire fraud and one count of obstruction of justice.
Barai also was charged with three counts of substantive securities fraud. Barai and Longueuil appeared briefly in court Tuesday but were expected to enter pleas later.
Authorities said all four men conspired from 2006 to 2010 to obtain inside information, including detailed earnings data, about numerous public companies.
(Arun Kumar can be contacted at arun.kumar@ians.in)
