A FORMER Citigroup hedge fund manager was the latest figure to be identified as a co-conspirator in the US authorities’ probe into insider trading yesterday.
Samir Barai, a Citi managing director who founded Barai Capital Management in 2008, was the fund manager referred to in court papers who allegedly took inside information on technology stocks from 2006 to 2008, a Wall St Journal report said.
Barai’s involvement is the first time a hedge fund manager has been implicated in the case, which is investigating whether technology firm employees passed information to funds. A number of employees have been arrested and charged but no hedge funds had been implicated until now.
Barai has not yet been charged with any wrongdoing.
Barai’s involvement centres on a complaint filed by the US Attorney in December, which charges a technology consultant, Winifred Jiau, with insider trading.
Jiau was charged with sharing private information about companies including Marvell and Nvidia in a number of telephone conversations with a hedge fund manager.
In two such calls made in May 2008, Jiau told hedge fund portfolio managers confidential information about Marvell’s quarterly revenues, margins and earnings per share, before the public announcement.
But the recordings of those conversations were seized by US law enforcers after a raid on Barai’s offices, reports said.
The complaint alleges that Barai’s firm made profits of more than $820,000 (£517,000) from the tips. Jiau received more than $200,000 from the funds as a consultant with an “expert networking firm,” Primary Global Research.
Eight employees of the networking firm have now been arrested in the probe.