NEW YORK ( TheStreet) -- Samir Barai, the founder of New York-based Barai Capital Management and a former hedge-fund manager for Citigroup ( C) has been drawn into the government's insider-trading investigation as a co-conspirator in the case, the Wall Street Journal reports, citing people familiar with the matter. The government investigation is looking into whether hedge funds and other investors traded on inside information received from corporate employees freelancing as consultants for "expert-network" firms, according to the newspaper. It's the first time a hedge-fund manager has been publicly revealed as a co-conspirator in the case, the Journal notes. Prosecutors haven't disclosed any charges of wrongdoing against Barai. FBI agents raided his fund in November, the people familiar with the matter told the Journal. Barai used his affiliation with Citigroup to help market his own fund, according to people familiar with the firm. His role in the investigation involves conversations and trading that took place after Barai left Citigroup in 2007, and there is no indication the bank is implicated in the probe, according to the Journal. A Citigroup spokeswoman declined to comment for the newspaper. Barai didn't return calls from the Journal for comment. -- Written by Joseph Woelfel >To contact the writer of this article, click here: Joseph Woelfel >To submit a news tip, send an email to: firstname.lastname@example.org. Samir Barai The hedge-fund manager--Samir Barai, the 39-year-old founder of New York-based Barai Capital Management--didn't return calls for comment. Prosecutors haven't disclosed any charges of wrongdoing against Mr. Barai in the still-unfolding investigation. FBI agents raided his fund in November, the people familiar with the matter say, but the fund's identity hasn't before been made public.The FBI and Manhattan U.S. Attorney's office declined to comment. The development broadens the known scope of a burgeoning criminal probe because it marks the first time a hedge-fund manager has been publicly revealed as a co-conspirator in the case. The investigation is examining whether hedge funds and other investors traded on inside information received from corporate employees freelancing as consultants for "expert-network" firms. Mr. Barai made his name at Citigroup in a high-profile hedge-fund position and he used that affiliation to help market his own fund, according to people familiar with the firm. His role in the investigation involves conversations and trading that took place after Mr. Barai left Citigroup in 2007, and there is no indication the bank is implicated in the probe. A Citigroup spokeswoman declined to comment. A criminal complaint filed in the case against an expert-network consultant said FBI agents raided the offices of an unnamed hedge fund, seizing recordings of telephone calls in which the fund's founder and a research analyst discussed inside information with the employee about technology companies including Marvell Technology Group Ltd. and Nvidia Corp. More ¿ Topics: Insider Trading That hedge fund is Barai Capital and the founder is Mr. Barai, who was identified as "CC-1," or an unnamed co-conspirator, in the complaint, according to people familiar with the matter. The complaint, filed last month in a New York federal court, alleged that Winifred Jiau, a consultant for expert-network firm Primary Global Research LLC, provided inside information about publicly traded companies to hedge-fund managers. The complaint also refers to a cooperating witness in the case, who is an analyst working for Mr. Barai, people familiar with the matter say. "There were some individuals who CC-1 communicated directly with in order to receive inside information," including Ms. Jiau, according to the complaint. "CC-1 sometimes recorded CC-1's conversations with Jiau on a digital audio recorder...and/or had CW-1 listen in on the conversations so that CW-1 heard the inside information provided by Jiau." Prosecutors said the hedge fund, identified by the people familiar with the matter as Barai, received more than $820,000 in May and June 2008 from trading ahead of Marvell's earnings based on inside information provided by Ms. Jiau. The people familiar with the matter identified "CW-1," or a cooperating witness, as Jason Pflaum, a 38-year-old technology analyst at Barai Capital. The Jiau complaint says the analyst, who began working at the hedge fund at about March 2008, has entered a guilty plea on charges of conspiracy and securities fraud and has been cooperating in the government's investigation in hopes of a reduced sentence. Mr. Pflaum didn't respond to requests for comment. Two other Barai Capital employees--Jeffrey Wilkins, chief financial officer, and Michael Colman, a trader--declined to comment when reached at their homes last week. There is no indication that either Mr. Wilkins or Mr. Colman is involved in the case. Fred Hafetz, a lawyer for Ms. Jiau, said his client "looks forward to her day in court." Primary Global declined to comment. A spokesman for Nvidia declined to comment. Marvell didn't respond to requests for comment. The government's broadening insider-trading probe has resulted in criminal charges against eight employees or technology-industry consultants who worked for Primary Global Research, including Ms. Jiau, who was charged with conspiracy and securities fraud. In November, the FBI conducted raids of hedge-fund firms Level Global Investors, Diamondback Capital Management and Loch Capital Management. The three firms have said they aren't targets of the insider-trading investigation. Diamondback and Level Global have said they are cooperating with authorities. Ms. Jiau, 43, learned that at least some of the calls she made with Barai Capital were recorded, a person familiar with the matter says, but believed the reason was that Mr. Barai couldn't hear well.Mr. Barai has a severe, lifelong hearing impairment, and uses hearing aids and other technology to communicate, including while on telephone calls, according to people who know him. In an August 2008 profile for the magazine Absolute Return, Mr. Barai discussed having an electronic-hearing device, and using computers and other technology to help. Mr. Barai launched his hedge fund in 2008 after leaving Citigroup's hedge-fund unit. At Citigroup, he ran a technology, media and telecommunications stock portfolio that produced strong returns for the bank's Tribeca hedge fund, says a person familiar with the matter. Citigroup executives decided in 2007 to close Tribeca, which had produced mediocre investment returns overall and failed to attract money as expected. Barai Capital itself never gained much traction with new investors. The firm managed less than $100 million in assets as of last fall, Mr. Barai told other hedge-fund managers and investors in October, when he spoke at an industry roundtable discussion in New York. The fund has been profitable, however, Mr. Barai told his roundtable audience in October. Barai Capital achieved a cumulative total return of 13% over 2-1/2 years, he said, according to a transcript of the discussion from online hedge-fund news provider Opalesque. In November, two agents dressed in street clothes flashed their FBI identification and announced their destination as Barai Capital for a video surveillance system at a Manhattan building, where the hedge fund was a tenant, said Augustus Tudzi, a security guard there. "They just showed me the ID and said they were going to Barai Capital," he said. Mr. Tudzi said the agents arrived in the afternoon and that he hadn't seen them leave by the time his shift ended at 5 p.m. Sharon Adamo, the building manager, said she was also aware FBI agents had come to visit Barai Capital around November. Building employees said that shortly after the FBI visit, Barai Capital left the offices, as had been earlier planned. It wasn't clear whether the fund has moved to another location or has shut down. Voicemail boxes at numbers for Barai weren't accepting messages in recent days. An outgoing message said: "The office is closed for the holiday." (Reuters) - The founder of U.S. hedge fund firm Barai Capital Management has been drawn into the government's insider trading probe that involves "expert network" firms, the Wall Street Journal said, citing people familiar with the matter. Samir Barai, the founder of Barai Capital, has been named co-conspirator in the investigation that examines whether hedge funds and other investors traded on inside information received from corporate employees freelancing as consultants for "expert network" firms, the Journal said. However, prosecutors have not disclosed any charges of wrongdoing against Barai in the ongoing investigation, the paper said. Barai Capital was raided by the Federal Bureau of Investigation agents in November, the newspaper said, citing people familiar with the matter. Barai did not return calls for comment, the Journal said. Barai Capital could not immediately be reached for comment by Reuters outside regular U.S. business hours.