A fresh round of insider-trading prosecutions involving hedge funds may be in the works judging by some unusual name-dropping during two recent guilty pleas in the long-running probe.

Two former research consultants told a Manhattan federal judge that they gave confidential corporate information to traders at three mid-sized hedge funds: STG Capital, G-Core Capital and Kingdom Ridge Capital. STG and G-Core both closed late last year after a string of FBI raids and subpoenas on hedge funds related to trading probes.

No one at the three funds has been charged with wrongdoing. However, the disclosure of their names suggests a road map that prosecutors may be following as they continue to pursue allegations of wrongful trading in the $2 trillion hedge fund industry.

The naming of the traders could be intended to pressure them or others to plead guilty or come forward with information, legal experts say. The office of Manhattan U.S. Attorney Preet Bharara recently has won a string of insider trading cases, including the conviction in May of one-time hedge-fund billionaire Raj Rajaratnam, and secured numerous guilty pleas in the trading probes.

This may be the use of a plea allocution to signal that the ship is sailing and to get the named people to cooperate in order to get others, Daniel Richman, a professor at Columbia Law School, said of the airing of the traders' names.

RAISING EYEBROWS

Consultants Mark Longoria and Walter Shimoon, who both worked for expert networking firm Primary Global Research, both have admitted they supplied hedge-fund traders with tips about technology company earnings and sales trends. Longoria pleaded guilty on June 30; Shimoon on July 5.

Former prosecutors say it is rare for defendants pleading guilty to be so open about identifying others who may have engaged in crimes but have not been accused of them.

In fact, the official procedure manual for U.S. prosecutors says it is generally not appropriate for a prosecutor to identify an uncharged wrongdoer during a plea proceeding. The manual also says that a prosecutor should not cause a defendant pleading guilty to name that person either.

Ellen Davis, a spokeswoman for Bharara, declined to comment.

Both Longoria and Shimoon entered their pleas before U.S. District Judge Jed Rakoff, who has a reputation for asking tough questions and pushing defendants to be as forthcoming as possible during plea hearings.

The name Kingdom Ridge Capital was provided by a prosecutor in response to a question from Rakoff that Shimoon seemed to have had trouble answering. The judge's questions may have unwittingly aided prosecutors in getting names of traders into court records that might otherwise have remained secret.

It's the best possible world where the prosecutor wants the name out but is hamstrung by the rules, former Brooklyn, New York, federal prosecutor Winston Chan, who is not involved in the case, said about the disclosure of the names. Chan is now an attorney at law firm Gibson, Dunn & Crutcher LLP.

A jury in June convicted Winifred Jiau, another former Primary Global consultant, of providing traders with inside tips. Earlier this year, prosecutors secured guilty pleas from two former portfolio managers at trader Steven Cohen's SAC Capital Advisors hedge fund, along with a number of other former Primary Global consultants.

Prosecutors have not lodged any allegations of improper trading against Cohen or anyone currently associated with his Stamford, Connecticut-based fund.

Prosecutors have a lot of material to sift through as they investigate. In court filings, they have told defense lawyers they have gathered more than 1,800 audio tapes and emails from 100 people in their probe into the expert network industry, businesses that specialize in matching hedge funds with industry consultants. Also, more than two dozen hedge funds have received subpoenas, sources have said.

According to an affidavit from an FBI agent filed on Tuesday, the government received approval in December 2008 to record phone calls of Richard Grodin and Dipak Patel, both former portfolio managers at SAC Capital. Neither has been criminally charged. They could not be reached for a comment on Wednesday.

EXPERTS WITH BIG NETWORKS

Longoria, a former Advanced Micro Devices Inc employee, said he provided confidential information to Steven Glass, the founder of STG Capital, a one-time $200 million technology-focused fund.

He also said he gave information to Gurinder of G-Core. G-Core, a fund set up by Ian Goodman, a former top trader with SAC Capital, also closed last year. One of Goodman's first hires at G-Core was trader Gurinder Kalra.

Calls to STG Capital and G-Core were not returned.

In January, Glass told Reuters that his firm's relationship with Primary Global did not play any part in his decision to shutter the fund. He did not respond to an email this week seeking a comment.

Goodman, once a top trader for Cohen's SAC Capital, launched G-Core in 2008 with about $200 million raised from investors.

During his plea, Shimoon, a former Flextronics employee, said he had shared information with a trader named Nick at a White Plains, New York, hedge fund.

Under prodding by Rakoff, U.S. prosecutor Antonia Apps identified the trader as Nicholas Caputo, an employee of Kingdom Ridge Capital, another hedge fund formed by people who previously worked at SAC Capital.

Glenn Colton, an attorney for Kingdom Ridge, said the hedge fund was surprised by Shimoon's plea.

There was simply no reason for an innocent party like Kingdom Ridge to be named in such an unfair and misleading manner, Colton said.

Shimoon also said he worked for John Kinnucan's Broadband Research. Late last year, Kinnucan rebuffed overtures by FBI agents to wear a wire and help with the insider-trading case. Kinnucan has told Reuters that he did nothing wrong and that the information he gathered on technology companies about sales trends and new products was legitimate.

(Reporting by Svea Herbst-Bayliss and Basil Katz; editing by Matthew Goldstein, Martha Graybow and Matthew Lewis)