* Donald Longueuil to plead guilty Thursday - prosecutor
* Don Chu in talks to plead guilty on conspiracy counts
* Insider trading probe focuses on expert network firms
(Adds expected Longueuil guilty plea throughout)
By Jonathan Stempel
NEW YORK, April 27 A former portfolio manager
at Steven Cohen's SAC Capital Advisers LP will plead guilty on
Thursday to charges arising from a federal probe of insider
trading, a prosecutor said at a court hearing.
Donald Longueuil, accused of receiving corporate secrets
while working at SAC Capital, is expected to file a request
changing his not guilty plea to guilty, Assistant U.S. Attorney
David Leibowitz said at a Wednesday afternoon hearing.
"It is certainly my understanding" that a so-called
"change-of-plea" application will be filed, Leibowitz told U.S.
District Judge Jed Rakoff.
Separately, Don Ching Trang Chu, a former employee of a
so-called expert network company, is in talks to enter his own
guilty plea, lawyers said at a hearing earlier Wednesday before
Rakoff in the same Manhattan federal courtroom.
The afternoon hearing concerned whether the government's
case against Longueuil's co-defendant Winifred Jiau, a former
consultant for expert network company Primary Global Research
LLC, should proceed separately.
Rakoff said a Longueuil guilty plea would make that issue
Another former SAC employee, analyst Noah Freeman, pleaded
guilty to securities fraud and is cooperating with the
government case against Longueuil, a one-time friend of
Craig Carpenito, an Alston & Bird LLP partner representing
Longueuil, did not immediately return requests for comment.
More than one dozen defendants have been charged or pleaded
guilty since November as part of a federal crackdown on the
solicitation of illegal stock tips from consultants working for
so-called expert network firms. [ID:nN08283464]
These firms help hedge funds obtain information about
public companies. Insider trading could result from trades made
on leaks of material, nonpublic information.
Prosecutors accused Longueuil of securities fraud and
conspiracy for trading on leaks by Jiau from insiders at
chipmaker Marvell Technology Group Ltd (MRVL.O), and receiving
leaks from Jiau on chipmaker Nvidia Corp (NVDA.O).
Longueuil was also charged with obstruction of justice.
Prosecutors said phone taps show him admitting to Freeman to
destroying a flash drive and two external hard drives, and then
walking the darkened streets near his Manhattan home at 2 a.m.
to look for garbage trucks in which to throw them out.
Stamford, Connecticut-based SAC, which invests roughly $13
billion, has not been implicated in the probe.
CHU IN TALKS, PLEADS NOT GUILTY
In the earlier proceeding before Rakoff, Chu pleaded not
guilty to charges of conspiracy to commit securities fraud and
conspiracy to commit wire fraud.
Chu, 57, waived his right to be charged by a grand jury.
His lawyer James DeVita, a partner at Day Pitney LLP, said
there would not have been "any advantage" to doing so.
The defendant entered his plea after Leibowitz told Rakoff
there had been "extensive" plea negotiations, and that talks
are "still ongoing." A conference was set for June 28.
Prosecutors charged the Somerset, New Jersey, resident with
passing tips to Richard Choo-Beng Lee, who ran a now-closed
California hedge fund Spherix Capital LLC, beginning in 2008.
Lee and Ali Far, who also ran Spherix, pleaded guilty to
trading on inside information in connection with a separate
insider trading probe centered on Galleon Group founder Raj
Companies that were subjects of inside tips from Chu
included chipmakers Atheros Communications Inc ATHR.O and
Broadcom Corp BRCM.O and Canada's Sierra Wireless Inc
(SW.TO), the government has said.
Several others once affiliated with Mountain View,
California-based Primary Global have been implicated in the
insider trading probe.
Rajaratnam's insider trading trial is in its eighth week.
Jury deliberations began on Monday.
The cases are U.S. v. Longueuil, U.S. District Court,
Southern District of New York, No. 11-cr-00161, and U.S. v. Chu
in the same court, No. 10-mj-02625.
(Reporting by Jonathan Stempel; Editing by Matthew Lewis and