November 5, 2009 / 8:45 PM / 9 years ago

UPDATE 1-Trader pleading guilty also worked at SAC Capital

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NEW YORK, Nov 5 (Reuters) - Ali Far and Choo Beng Lee, the former hedge fund traders turned government informants in the Galleon insider trading case, have admitted to engaging in illegal insider trading for many years, according to their cooperation agreements.

In the case of Lee, the agreements suggest that he engaged in illegal insider trading while working at Steven Cohen’s SAC Capital, the Connecticut-based hedge fund.

The cooperation agreements, released on Thursday by federal prosecutors, say Far has admitted engaging in insider trading as far back as 2003. During that period, Far still was working for Galleon.

In the case of Lee, the alleged wrongful conduct dates back as far as 1994. In both cases, this would suggest the men engaged in insider trading while working at other hedge funds before setting up their own fund, Spherix Capital, in 2007.

The cooperation agreements do not accuse Cohen or anyone else at SAC of wrongdoing. Lee has not been been associated with SAC since January 2004.

SAC was not immediately available for comment.

Federal prosecutors did not immediately comment on the plea agreements. Jeffrey Bornstein, the attorney for Lee, declined to comment on the cooperation agreement. He did say his client would cooperate with the government according to the terms of his agreement. Steven Kobre, the attorney for Far, declined to comment.

Prosecutors, according to the agreements, can ask a judge to consider the admissions by Lee and Far to past bad behavior at sentencing.

The statute of limitations for prosecuting insider trading is five years, which may be why neither Lee nor Far is being charged with some of the past offenses. (Reporting by Matthew Goldstein; Editing by Leslie Gevirtz, Gary Hill)

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