Rajaratnam’s Arrest Led Hedge Fund Analyst to Destroy Insider Trading Data

Bloomberg reports that former hedge fund founder Raj Rajaratnam leaves court after he was convicted on all counts of fraud and conspiracy, in New York, on May 11, 2011. Photographer: Emmanuel Dunand/AFP/Getty Images

Jason Pflaum, a former Barai Capital Management LP analyst, told jurors he destroyed data his firm got from so-called expert networkers after Galleon Group LLC co- founder Raj Rajaratnam was arrested on insider trading charges.

Pflaum testified yesterday in federal court in Manhattan during the trial of Winifred Jiau, 43, the former Primary Global Research LLC consultant charged with illegally passing tips about Nvidia Corp. (NVDA) and Marvell Technology Group Ltd. (MRVL) to hedge fund managers, including Pflaum’s former boss, Samir Barai.

Under questioning by Jiau’s lawyer, Joanna Hendon, Pflaum, 38, said at least eight people provided Barai with nonpublic information about technology companies, including Mark Anthony Longoria, a former employee of Advanced Micro Devices Inc. (AMD) Pflaum said he destroyed the files related to those tippers without deleting files related to Jiau.

“What caused you to delete the files?” Hendon asked.
“The context was the Galleon case,” Pflaum said...
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