March 1, 2016 / 9:16 PM / 4 years ago

Hedge fund manager spared prison for insider trading

NEW YORK, March 1 (Reuters) - A former hedge fund manager who admitted to trading on non-public information about various technology companies and became a cooperating witness in a wide-ranging insider trading investigation was spared prison on Tuesday by a federal judge.

Samir Barai, the founder of Barai Capital Management, was sentenced by U.S. District Judge Deborah Batts in Manhattan to two years of supervised release and ordered to forfeit $216,603.

Barai, 46, apologized for conduct that caused him to “lose my good name and reputation,” and made him one of dozens charged by federal prosecutors under Manhattan U.S. Attorney Preet Bharara during an insider trading crackdown.

“I paid a high price for these crimes,” he said.

Barai pleaded guilty in 2011 to securities fraud and other charges over a scheme that also involved Noah Freeman and Donald Longueuil, two former portfolio managers at billionaire Steven A. Cohen’s SAC Capital Advisors hedge fund.

Prosecutors said the men were close friends who sought an edge by pooling inside information they obtained about companies including Nvidia Corp and Marvell Technology Group Ltd .

Among the people who provided Barai and Freeman information was Winifred Jiau, a consultant with Primary Global Research, an expert networking firm that paired investors with industry experts, many of whom worked for publicly-traded companies.

Prosecutors said Jiau, who was also a contract employee for Nvidia, had formed an “investment club” with a finance employee at Nvidia and Marvell, giving her access to details about its financial results in 2007 and 2008 that she could pass along.

Barai’s illegal gains totaled $3.91 million, prosecutors said.

Jiau was convicted at trial and sentenced in 2011 to four years in prison. Longueuil pleaded guilty and was sentenced to 2-1/2 years in prison in 2011. Freeman pleaded guilty and was given a non-prison sentence in February 2015.

The case is U.S. v. Barai, U.S. District Court, Southern District of New York, No. 11-cr-00116. (Reporting by Nate Raymond in New York; Editing by Bernard Orr)

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