"U just go into office, " Mr. Barai responded, according to a transcript in the government's complaint.
The fund managers were Noah Freeman and Samir Barai, who both pleaded guilty in early 2011.
FORBES: Another Primary Global Expert Sentenced to Prison for Insider Trading
Mr. Barai, 39, meanwhile, left Tribeca when it shut down and started his own hedge fund.
Prosecutors say Mr. Barai had been using Primary Global to obtain investment information this way.
The primary evidence in this case was the actual taped conversation of Jiau passing the information to Barai.
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The hedge fund clients, Samir Barai and Noah Freeman made trades off of that information and made millions.
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He used the model to develop a forecast and was paid by Barai and Freeman for the results.
FORBES: Another Primary Global Expert Sentenced to Prison for Insider Trading
Mr. Barai was highlighted in a hedge-fund trade publication about overcoming adversity related to his lifelong hearing impairment.
Barai and Pflaum, people who know them say, because the small firm had few employees involved in investment decisions.
The government also secured a securities fraud guilty plea from Jason Pflaum, who worked for Barai at Barai Capital.
Barai "also has informed its investors that it commenced an orderly wind down of the BCM funds, " the letter said.
According to the criminal complaint last week, this appears to be the first time Mr. Barai became aware of the investigation.
Mr. Barai and other employees of Barai Capital either didn't respond to requests for comment or declined to comment in recent days.
Pocket change for Barai who was already making millions from insider tips.
FORBES: Another Primary Global Expert Sentenced to Prison for Insider Trading
In fact, Jiau had no control or input into how much stock Barai and Freeman purchased, or shorted, in order to make their millions.
FORBES: Former Marvell Analyst Gets Probation on Insider Scheme
Prosecutors say Mr. Barai also put Mr. Pflaum in touch with contacts to obtain insider information, including some he had allegedly used while at Citigroup.
Winifred Jiau, a consultant for Primary Global, passed along privileged inside on Marvell Technology (NASDAQ: MRVL) in May 2008 to traders at hedge fund Barai Capital.
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Barai took to recording personal conversations to make sure he had the information right from his sources and to also accommodate a hearing problem he had.
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Launching Barai Capital Management together created a bond between Messrs.
Barai and Freeman continue their cooperation with the government.
FORBES: Another Primary Global Expert Sentenced to Prison for Insider Trading
Federal prosecutors unsealed a criminal complaint against hedge fund manager Samir Barai, who runs Barai Capital, that accuses him of using insider information to trade in stocks like Marvell Technology, Nvidia and Fairchild Semiconductor.
Mr. Pflaum listened in to conference calls during which one of the contacts, a California tech-company contractor named Winifred Jiau, allegedly gave Mr. Barai and Mr. Freeman information on chip maker Marvell Technology Group Ltd.
The two traders, along with a third man criminally charged last week, Samir Barai, formed a "triangle of trust, " Manhattan U.S. Attorney Preet Bharara said at a news conference, sharing information from multiple sources with each other.
In the Barai matter, the fund "informed us that they are cooperating fully with the government's investigation, " according to a letter sent Monday to clients of Protege Partners, a New York investment firm that focuses on providing seed money to hedge funds.
Besides participating in conference calls with Mr. Freeman, people who know Mr. Barai say he had dinner with Mr. Longueuil in New York about every other month, sharing pasta and wine at a low-key Manhattan restaurant as they discussed tech-investment ideas and relationships, according to a person who knows them.
Manhattan U.S. Attorney Preet Bharara could not have been more withering yesterday in his attack on what he depicted as a culture of fraud on Wall Street, as he gave a press conference announcing insider-trading charges against three hedge fund managers, Noah Freeman and Donald Longueuil, formerly of SAC Capital Advisors, and Samir Barai, who ran Barai Capital Management.
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