Last week, alleged insider trader Samir Barai revealed details to the FBI about how he exchanged information with expert network consultant and another alleged insider trader, Wini Jiau.
Barai told the FBI how his former analyst, Jason Pflaum (who is cooperating with the government) “would listen in on his calls with [Winifred] Jiau and feed Barai questions to ask, while writing down inside information that Jiau provided,” Bloomberg reported.
Jiau is accused of passing along insider tips on tech companies to various hedge funds, including Barai Capital, the eponymous and now-shuttered hedge fund run by Samir Barai.
The meeting during which Barai revealed these details is known as a “proffer session” — essentially a meeting involving law enforcement agents, government prosecutors and a criminal suspect, in which the suspect can “admit to criminal activity and any admissions cannot be directly used against [him] later at trial” and “the information given at the proffer session could turn [the suspect] into a witness or a target.”
A memo of the proffer meeting, together with IMs and emails, shone more light on Jiau’s alleged methods of trading information for cash, and, how she alluded to her sources and their fees:
“As Jiau put it in another e-mail to Barai days later, her ‘cooks don’t talk to me without sugar. They are not my boyfriends.'”
IMs also showed Jiau angling for more money for her alleged sources at the tech companies.
According to instant messages from May 2008, Jiau “demanded additional payments from Barai in order to pay her inside sources at Marvell and Nvidia $2,000 each for their information,” prosecutors said.
“Can u confirm amt?” Barai wrote to Pflaum, according to the prosecutors. “What is she saying?”
“Each source 2k,” Pflaum replied. “Need to commit now,” he relayed to Barai. “Don’t forget ur promise,”