Indian-American pleads guilty in U.S. to insider trading
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Indian-American pleads guilty in U.S. to insider trading

Monday, 30 May 2011, 11:04 Hrs
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New York: Samir Barai, an Indian-American hedge fund portfolio manager, has pleaded guilty to securities fraud and other charges brought on as part of the US government's largest crackdown on insider trading at hedge funds.

Barai, 39, founder of Barai Capital Management, also pleaded guilty Friday in a Manhattan federal court to conspiracy to commit securities and wire fraud and obstruction for impeding a federal grand jury probe by destroying evidence.

Magistrate Nathaniel Fox said Barai could face as long as 65 years in prison when he is sentenced Aug 29.

Admitting he conspired with two other fund managers to violate federal securities laws, Barai said: "I deeply regret all of my actions in this case."

Barai said on "numerous occasions" from early 2006 to late 2010, "I paid for and utilised the services of an expert networking firm who employed persons working at technology companies."

He said his associates listened in on calls with expert networking sources who provided "material, non-public information, including revenues, gross margins and earnings".

Barai said that on Nov 19, 2010, he saw an article in the Wall Street Journal that described a federal grand jury probe in New York investigating hedge fund managers who used expert networking consultants to get inside information.

"I contacted my research analyst and directed him to destroy certain electronic and hard copies related to trading activities," he said.

Barai will provide "substantial assistance", prosecutors said and agreed to submit a letter asking US District Judge Deborah Batts to impose a reduced sentence, citing his cooperation.

Barai and 12 others are charged in a federal investigation of insider trading brought by US Attorney Preet Bharara in Manhattan.
Source: IANS
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