Photo: Patrick McMullan
Jason Pflaum has agreed to cooperate with the FBI as they attempt to charge his boss, Samir Barai, with insider trading in the latest scandal. It appears that just months after Pflaum began working for Barai Capital, he participated in a call about Marvell’s earnings that ensnared him in the scandal.
The 38-year old tech analyst has apparently been with the fund since about March 2008, but his name only emerged today. The Wall Street Journal identified Plaum as the anonymous cooperating witness called “CW-1” in the FBI’s complaint against Winnie Jiau, the “expert witness” who allegedly gave Pflaum’s boss, Barai, inside information about Marvell.
Barai’s name has also been kept under wraps until today, but he’s a crucial man in the FBI’s case.
He’s named a “co-conspirator” by the FBI, unlike any of the other hedge fund managers involved so far (as far as we know). His fund is tiny — less than $100 million, according to the WSJ — but he allegedly made $820,000 in May and June 2008 by trading ahead of Marvell’s earnings (just months after Pflaum began working for him).
From the WSJ:
FBI agents raided the offices of an unnamed hedge fund, seizing recordings of telephone calls in which the fund’s founder and a research analyst discussed inside information with the employee about technology companies including Marvell Technology Group Ltd. and Nvidia Corp.
Pflaum entered a guilty plea on charges of conspiracy and securities fraud and has been cooperating in the government’s investigation in hopes of a reduced sentence.