Barai Capital Founder Avoids Prison Term for Insider Trading

  • Samir Barai gets credit for helping prosecutors in probe
  • Barai admitted making $3.9 million in Insider-Trading Scheme

The founder of Barai Capital Management LP avoided prison Tuesday when a federal judge credited his help with the U.S. crackdown on illicit trading at hedge funds.

Before he was sentenced Tuesday in Manhattan, Samir Barai tearfully asked U.S. District Deborah Batts not to send him to prison, saying he’d learned his lesson during the five years he spent assisting federal investigators. Batts agreed to sentence him to the time he already spent locked up after his arrest.

Barai, a Harvard Business School graduate, teamed up with SAC Capital Advisors LP fund managers Noah Freeman and Donald Longueuil in a four-year scheme to get inside information from technology company employees who were moonlighting as consultants, according to testimony at several U.S. trials.

“I have no one to blame but myself,” Barai told the judge. “I paid a high price for those crimes -- I lost my career, which I worked so hard to create. I lost my good name and my reputation. I know today that I am a very different person than I was five years ago. I ask you to allow me to continue to rebuild my life.”

Made $3.9 Million

Barai, who made $3.9 million by trading on inside information obtained from several sources, helped the U.S. build cases against several people, including Longueuil and Winifred Jiau, then a consultant at expert-networking firm Primary Global Research LLC, according to Assistant U.S. Attorney Harry Chernoff. 

Barai now runs a pediatric urgent-care facility in New Jersey, his lawyer Evan Barr said. He helped prosecutors leading up to Jiau’s 2011 trial and also provided information that led to the guilty plea of Tai Nguyen, another expert-network consultant, Barr said. 

After a 2014 federal appeals court ruling made it harder for the government to win insider-trading cases, defendants including Nguyen have tried to have their their convictions overturned, Chernoff said. Barai has continued to help the U.S. in that case and can testify should more trials be necessary. 

“Mr. Barai has expressed his agreement to make himself available for such hearings,” the prosecutor said.

Secret Recordings

Barai’s lawyer told the judge that his client served as an unpaid consultant for the Federal Bureau of Investigation and made undercover recordings of a former colleague in 2013.

Batts directed Barai to continue helping in Nguyen’s case. She also ordered him to forfeit $216,603 he made in the scheme.

Freeman also cooperated with the U.S. and got a sentence of time served. Longueuil, who didn’t cooperate, was given 30 months in prison. 

The case is U.S. v. Barai 11-cr-00116, U.S. District Court, Southern District of New York (Manhattan).

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