Hedge Fund Managers Insider Trading

Hedge Fund Managers Insider Trading

Three Managers & Analyst Charged with Insider Trading

The insider trading roundup by federal regulators and enforcers continues with the rumored charges against three hedge fund managers and an analyst. The insider trading probe is part of the larger investigation of the hedge fund industry and so-called expert networks passing along information to fund managers and employees. The investigation is a black mark on the industry just as fund managers were regaining the confidence of investors after the ponzi scheme run by money manager Bernard Madoff and other recent scandals in the financial world.

Law enforcement has been scrutinizing the relationship between hedge funds and so-called expert networks—companies that pair investment firms with public company employees, who offer insight into their companies and industries. The problem, according to prosecutors, is that these conversations sometimes include material nonpublic information.

One of the three hedge fund managers due to be charged, WSJ reports, is Samir Barai, who founded New York-based Barai Capital Management in 2008 after leaving Citigroup’s hedge-fund unit. He has evidently been charged with obstruction of justice.

Charges are also expected against Jason Pflaum, 38, a technology analyst; Donald Longueuil, 35, formerly of CR Intrinsic Investors LLC, a division of hedge fund SAC Capital Advisors; and Noah Freeman, who worked at SAC Capital’s Boston office from 2008 until January 2010. Source

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