MORE GUILTY PLEAS IN THE EXPERT NETWORK INSIDER TRADING PROBE
The “expert network” insider trading probe continues to result in guilty pleas. Last Friday Samir Barai, a portfolio manager at two different New York hedge funds, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, one count of wire fraud and one count of obstruction of justice. Son Ngoc Nguyen, a former senior financial analyst for Nvidia Corp., pleaded guilty pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud. U.S. v. Jiau, No. 11-161 (S.D.N.Y.).
The charges against Mr. Barai involve two overlapping conspiracies. Between 2006 and 2010 he conspired to insider trade with Donald Longueuil, Noah Freeman, Jason Pflaum and Winifred Jiau. The inside information involved several public companies including NVIDIA and Marvel Technology Group, Ltd. Frequently the group obtained information through an expert network in addition to other sources.
In May 2008 Mr. Barai obtained inside information from Ms. Jiau regarding Marvell’s financial results for the quarter ending on May 3, 2008. As a result of trading in the shares of Marvell he had profits of over $800,000. During the course of the scheme he destroyed records and other evidence relating to it.
In a separate scheme, from 2007 through early 2009, Mr. Nguyen conspired with an employee in the finance department of Marvell and shared inside information with Ms. Jiau about the two companies. Ms. Jiau used the information to trade for her account and also sold it to the group which included Mr. Barai.
Messrs. Longuil, Freeman and Pflaum pleaded guilty. The case against Ms. Jiau, a former technology consultant for expert network Primary Global, began trial on Monday before Judge Rakoff in New York.
Seminar: June 8, 2011, 12:00 — 1:30, Trends In DOJ and SEC Financial Fraud Cases, ABA Program, Live in Washington, D.C. and webcast nationally. Co-Chairs: Thomas Gorman and Frank Razzano. Panel: Lorin Reisner, Deputy Director, Division of Enforcement, SEC: Patrick Stokes, Deputy Chief, Fraud Section, Department of Justice; Stephen Gannon, Deputy General Counsel and V.P., Capital One. The program is live, and will be broadcast from, the Metropolitan Club of Washington, D.C. (dress code — jacket and tie for gentlemen, similar for ladies; cell phone use not permitted in the club; lunch served).
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