Two Hedge Fund Managers Charged with Insider Trading; Two Others Plead Guilty

Four hedge fund managers have been charged by federal prosecutors on insider trading charges.

Two of the men were arrested Tuesday morning by the FBI. Two others have pleaded guilty, officials said. Three of the men work as hedge fund portfolio managers and one is a hedge fund analyst.

Samir Barai, Donald Longueuil, Jason Pflaum and Noah Freeman are the names of those allegedly involved in the scheme to defraud.

Read the criminal complaint against Barai and Longueuil here. Based on the criminal complaint, arrest warrants were issued for Barai and Longueuil. Both are facing charges of conspiracy, securities fraud and obstruction of justice.

Pflaum and Freeman have entered plea agreements, authorized by U.S. Attorney Preet Bharara.

Pflaum’s plea, available here, was entered December 17, 2010. Freeman’s plea, available here, was entered yesterday.

Both plea agreements request the substantial assistance of Pflaum and Freeman in this case. If they comply, a reduced sentence for their cooperation is possible. This is a huge incentive for Pflaum and Freeman, since both are looking at 25 years imprisonment for conspiracy and securities fraud.

The U.S. government has brought insider-trading charges against more than 30 people since October 2009 in an effort to crack down on the alleged criminality within the financial market.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Litigation, International Extradition and OFAC SDN Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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