Ex-SAC trader paints bad portrait of insider trading at hedge funds
Former SAC Capital employee Noah Freeman took the strand as a government witness last week in the trial of expert networking consultant Winifred Jiau. And he managed to paint a damning portrait of the hedge fund industry. Not only did he admit to insider trading while overseeing funds at SAC Capital, he also said that illegal insider trading (using information from so-called expert networking firms) was part of the business model at another hedge fund at which he once worked, Sonar Capital in Boston.
Sonar Capital denied the charge and called Freeman a subpar employee who is merely trying to secure more lenient sentencing by cooperating with the government. Freeman's cooperation has certainly been a boon to federal prosecutors, who used his information to charge Jiau as well as well as others in his insider trading ring: Donald Longueuil, formerly of SAC Capital; Samir Barai of Barai Capital Management; and Jason Pflaum, who worked with Barai.
Freeman told the jurors he provided information on more than a dozen individuals who likely "lawyer-ed up" a while ago. Freeman will be followed on the stand by at least three other cooperating witnesses. The defense, however, plans to call Barai as a witness. Should be interesting.
- here's a look from the New York Post