One major focus of the Feds’ insider trading cases du jour is the use of expert networks by hedge fund managers, and whether or not the information is “too” good (the government is of the opinion that it is). While a whole bunch of employees with various expert networks have been charged, one stands out as the leader in the field- Primary Global’s Winifred Jiau, who is the woman you wanted to get in good with if you were looking to (allegedly) trade on material non-public information. Jiau seems to have worked with everyone who’s been accused of insider trading (Donald Longueuil, Noah Freeman, the Goffer brothers and so on and so forth) and presumably had a waiting list for her tips. According to Assistant US Attorney David Leibowitz’s opening statement yesterday, Jiau’s information was “precise to the decimal point,” and even created her own code to discuss such info so that no one would ever catch on to what she and her clients were discussing, should their conversations be tapped.

Leibowitz said Jiau spoke in code, demanding payments for the information, which she called “sugar,” and describing her sources as “cooks” and referring to tips as “recipes.”

For example, if you’d been reading over Jiau’s shoulder on June 3, 2008, you would’ve seen the following IM and while perhaps felt a pang of hunger, been none the wiser:

Jiau wrote, “Cooks are on strike now,” adding later in the same conversation, “so drop some of your extra sugar to me.”

Barai replied, “yep.”

Jiau answered, “cooks don’t talk to me without sugar. they are not my boyfriends.”

Barai wrote that he’d gone on a “few dates,” adding that he hadn’t found them “boring.”

“Anyhow, I will know something when I got the sugar,” Jiau said. “before that, I don’t know anything.”

Subsequent conversations included the following, which we’ve attempted to crack:

* “Boil the water” (drum up short interest)

* “Pound with a mallet to a quarter inch thick” (sell a quarter of your shares)

* “Chop up fresh herbs and tuck them under the chicken’s skin along with a few pats of butter” (create an email trail)

* “Let the steak marinade overnight” (hold onto shares until tomorrow so as to not arouse suspicion with the timing of your trades)

* “Don’t overhandle the beef when shaping the meatballs” (???)

* “Using a fine mesh sieve, strain the custard mixture to remove any small clumps that may remain in the mixture” (destroy your usb drive with two pairs of pliers, divide them into little baggies, stash them in your North Face fleece and then chuck them in various garbage trucks around town)

Expert Networker Tapped ‘Cooks’ for Inside Tips, U.S. Says [Bloomberg]

108 comments (hidden to protect delicate sensibilities)
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Comments (108)

  1. Posted by Guest | June 3, 2011 at 4:28 PM

    “Don’t overhandle the beef when shaping the meatballs”
     
    This has to be Gasparino related..just has to be.

  2. Posted by Guest | June 3, 2011 at 4:28 PM

    “Don’t overhandle the beef when shaping the meatballs”
     
    This has to be Gasparino related..just has to be.

  3. Posted by Ivan Boesky | June 3, 2011 at 4:28 PM

    Nut masher.

  4. Posted by Anonymous | June 3, 2011 at 4:34 PM

    Great code words!

    -Jon Bon Jovi

  5. Posted by SuperAmused | June 3, 2011 at 4:36 PM

    Simply awesome, Bess. 

  6. Posted by Coco Austin's Oil Boy | June 3, 2011 at 4:37 PM

    Certain SEC staffers were called in to parse this one:

    “I have been handling your sausage and hope you have the mountain oysters to give me a cucumber facial….”

  7. Posted by Guest | June 3, 2011 at 4:55 PM

    BL, you cook? Marry me?

  8. Posted by Guest | June 3, 2011 at 4:58 PM

    um, what kind of recipe is that?

  9. Posted by Casual Observer | June 3, 2011 at 5:07 PM

    Sounds like this involved a bunch of joos and one jiau.

  10. Posted by Anonymous | June 3, 2011 at 5:24 PM

    Seconded

  11. Posted by Pepto Bismol required | June 3, 2011 at 5:38 PM

    sugar is sweet, but illegal million dollar profits just plain kick ass.

  12. Posted by Guest | June 3, 2011 at 5:49 PM

    Thirdeded.

  13. Posted by Capn Kirk | June 3, 2011 at 6:11 PM

    McCoy, do they execute bankers for insider trading in China?

  14. Posted by early hominid | June 3, 2011 at 6:24 PM

    Very sophisticated code.  It’s a miracle she ever got caught.  

      – Guy who overheard something equally subtle once at Beamers where “Mets tickets” turned out to be the vig on the loanshark payment and “Mr. Bubble” was this big fucking Russian guy who carried an icepick.     

  15. Posted by Anonymous | June 3, 2011 at 7:26 PM

    No mention of coconut sambol? 

    “The coconut sambol has a lot of sugar”

  16. Posted by Impliedvols | June 4, 2011 at 10:51 AM

    No. They are exectuted for ‘unidentified anti-democratic activity’. 

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    I think Askvisory or Gerson would hire her as a cook !

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