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SEC settles with woman whose brother sent her tips to SAC manager
April 8, 2013 / 9:07 PM / 4 years ago

SEC settles with woman whose brother sent her tips to SAC manager

* ThanhHa Bao tipped brother, who tipped ex-SAC manager

* No admission of wrongdoing

* Ex-SAC manager Freeman cooperating with prosecutors

By Jonathan Stempel

April 8 (Reuters) - A former employee at a medical devices company who leaked illegal tips to her younger brother, who then passed them to a former SAC Capital Advisors LP fund manager and others, has agreed to pay $144,910 to settle U.S. Securities and Exchange Commission civil fraud charges.

The SEC charged ThanhHa Bao, 57, with regularly passing quarterly earnings of Abaxis Inc, where she worked in the finance department, to her brother Tai Nguyen from 2006 to 2009.

It said Nguyen then sold the information to Noah Freeman, who worked at Sonar Capital Management LLC and later at SAC, and Barai Capital Management LP founder Samir Barai, resulting in more than $7.2 million of illegal gains based on the tips.

Nguyen, 50, was sentenced on March 14 to a year and a day in prison following his June 2012 guilty plea to conspiracy to commit securities and wire fraud. He also agreed to a $400,000 criminal forfeiture.

Bao was not criminally charged, but the Fremont, California resident agreed in the SEC accord to a five-year ban from serving as an officer or director of a public company. Abaxis is based in Union City, California, and is not a defendant.

Melinda Sarafa, a lawyer for Bao, declined to comment on her client’s settlement.

Nguyen had been president of Insight Research LLC, and was a consultant for an expert networking firm.

Freeman and Barai have pleaded guilty and are cooperating with prosecutors in a wide-ranging hedge fund insider trading probe unveiled in 2009. More than 70 people have been convicted or pleaded guilty.

SAC, run by billionaire Steven A. Cohen, agreed in March to pay nearly $616 million to settle two SEC cases alleging improper trading, without admitting or denying wrongdoing.

A $14 million settlement has won court approval, while approval is pending for a $602 million accord. Cohen has not been accused of wrongdoing.

The case is SEC v. Nguyen et al, U.S. District Court, Southern District of New York, No. 12-05009.

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