Citigroup "Hedge Fund A" is accused by federal prosecutors of trading on inside information in 2006 and 2007, a charge that stems from this week's arrest of hedge fund manager Samir Barai.  "Hedge Fund A" was identified in a parallel SEC civil lawsuit as Citigroup’s now-shut $2 billion Tribeca Global Management.  Mr. Barai ran the fund prior to opening his Barai Capital Management firm. 

According to the SEC complaint, the onetime Tribeca portfolio manager received information from an "insider" at South Portland, ME-based chip maker Fairchild.  This individual, described as the “Fairchild Source” by prosecutors, was allegedly a product manager who had given Barai nonpublic details about the firm including quarterly revenue information.  The hedge fund reportedly made more than $450,000 by trading in securities of Fairchild Semiconductor International.  U.S. prosecutors said the conspiracy extended into 2010, after Barai had left Citigroup.

Citigroup said it was fully cooperating with authorities on this matter.   [Bloomberg,2/9]