Federal prosecutors in New York obtained two more guilty pleas stemming from an investigation into supposed "expert network" firms, a hallmark of New York securities fraud in which connect investors to industry experts for a fee.
Samir Barai, a former hedge fund manager, and Sonny Nguyen, a former financial analyst at Nvidia Corp., were the seventh and eighth individuals to plead guilty to a variety of conspiracy and securities fraud charges. So far a total of 13 people have been charged in the scheme.
Mr. Barai admitted to receiving confidential inside information about a publicly traded technology company and sharing it with two other hedge fund managers. He also admitted to trying to conceal his crimes by ordering a research analyst at his firm to shred documents and destroy electronic files related to trading in November 2010, after learning about the government's insider trading crackdown.
In his hearing, Mr. Nguyen admitted to taking part in a conspiracy to commit securities fraud. For his part in the conspiracy, Mr. Nguyen provided inside information about Nvidia's finances in return for similar stock tips about other companies.
Cases such as this remind us that the scales of the financial markets are far too often tipped in favor of insiders, and regulators are often unable to discover these crimes until long after they have been committed.
This unfortunately, leaves smaller investors in a difficult situation. Many smaller investors want to invest in the markets in the hopes that they can grow their savings for their future retirement, or to provide income to support them now.
However, the financial markets can be a treacherous place for an inexperienced investor, and many people find themselves the victims of fraud committed by their stockbroker or other financial professional.
Therefore, investors should be very careful in selecting an investment professional, and even more so before investing on their own. Aboutsecuritieslaw.com provides useful information if you are choosing a financial advisor or if you believe you have been the victim of securities fraud.