Citi Gets Tied To The Insider Trading Probe: One Of Its Hedge Funds Made $450,000 From Samir Barai's Trades

Samir Barai, a deaf former Citi hedge fund manager who launced his own firm after working for the bank, has now involved his old employer in the insider trading scandal.

Barai surrendered to police on Tuesday morning and was charged with wire and securities fraud, as well as obstruction of justice.

It turns out that his alleged insider trading began when he was working for Citi back in 2006.

His trades on inside information netted Citi’s now-shuttered Tribeca hedge fund more than $450,000 in 2006 and 2007 Businessweek reports.

Barai allegedly paid a product manager at Fairchild Semiconductor $48,000 to get material, non-public information on the company, like revenue figures, which he then traded on.

When he left Citi to launch his eponymous hedge fund, Barai Capital, he allegedly continued to get inside information about publically traded tech companies including Fairchild and the charges against him stretch into 2010.

According to Businessweek,

After Barai set up Barai Capital, the insider gave him information about Fairchild’s sales, profit margins and inventory, and told him how much revenue the company collected from customers including Dell Inc., Samsung Electronics Co. Ltd. and Nokia Oyj, the SEC alleges.

Citi closed Tribeca in 2007 due to poor performance (though Barai’s portfolio was generally successful) and is not accused of any wrongdoing.

“We are fully cooperating with the authorities on this matter,” Citi said.

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