About eight people besides a Taiwan-born technology consultant who is on trial for insider trading provided stock tips to Barai Capital Management, a former employee of the hedge fund testified on Tuesday.
The names of other consultants or employees of semiconductor companies came out in cross-examination of a witness testifying against Winifred Jiau, the only person to go to trial so far in the so-called expert network branch of a U.S. crackdown on suspicious Wall Street trading.
Jiau's lawyer, Joanna Hendon, mentioned the names to show the jury that her client may not have been the only person with access to corporate secrets who is alleged to have leaked detailed earnings information to hedge funds in exchange for money.
A spokeswoman for the office of the Manhattan U.S. Attorney declined to comment on whether any of the people identified in Manhattan federal court were in any way part of the investigation.
At least 10 people charged, including witness Jason Pflaum, have pleaded guilty to criminal charges since last year's probe was announced of so-called expert network firms that match investment managers with public companies. Prosecutors say the defendants abused their fiduciary duties and traded or helped others trade illegally on confidential company information.
Pflaum was a research analyst at the hedge fund until the end of last year and is assisting the FBI and prosecutors in the investigation.
Pflaum also testified that he destroyed the computer files or printouts of three people who had provided his boss, Samir Barai, with secrets that made the fund between $1 million and $5 million.
The catalyst was the Galleon case when that broke, Pflaum said, referring to the October 2009 arrest of Galleon hedge fund founder Raj Rajaratnam who was convicted last month in the same courthouse on insider trading charges. Rajaratnam was the central figure in that branch of the government's investigation.
Pflaum testified that he and Barai discussed how there was more sensitivity about contacts we had that were over the line. Barai, said Pflaum, wanted to make sure I got rid of them (the files).
Barai pleaded guilty to criminal charges on May 27 and admitted conspiring with Jiau, 43, one-time consultant with Primary Global Research expert networking firm based in California. She has been denied bail after trial judge Jed Rakoff agreed with prosecutors that she might flee.
Pflaum also told the jury, which was chosen for Jiau's trial on June 1, that he and Barai had contact with John Kinnucan, the head of an Oregon research company who late last year publicly refused to help the government in its probe.
The former Barai analyst testified that he was part of joint phone calls between Samir Barai and Kinnucan and knew of a series of emails that were exchanged between them.
I don't recall him giving us any great information, Pflaum said.
Kinnucan's lawyer, Nathaniel Burney, contacted to comment on Tuesday's testimony mentioning his client, said: John Kinnucan never conveyed any inside information.
The case is USA v Winifred Jiau et al, U.S. District Court for the Southern District of New York, No. 11-00161.
(Reporting by Grant McCool, editing by Matthew Lewis)