Raj Rajaratnam brother charged with insider trading

Thu Mar 21, 2013 6:39pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Nate Raymond

NEW YORK (Reuters) - Raj Rajaratnam's younger brother was indicted on charges of conspiring in the insider-trading scheme for which the founder of the Galleon Group hedge fund was convicted nearly two years ago, U.S. prosecutors announced on Thursday.

Prosecutors said Rengan Rajaratnam, 42, conspired with his older brother to trade on non-public information concerning Clearwire Corp and Advanced Micro Devices Inc in 2008.

Rengan Rajaratnam was a portfolio manager at Galleon, and the trades for which he was charged resulted in nearly $1.2 million of illegal profit, according to U.S. Attorney Preet Bharara in Manhattan, who announced the charges.

Rengan Rajaratnam was charged with six counts of securities fraud and one count of conspiracy, and faces up to 20 years in prison on each of the fraud counts. He has not been arrested. He is not in the United States and is believed to be in Brazil, a person familiar with the matter said.

David Tobin, a lawyer for Rengan Rajaratnam, did not immediately respond to a request for comment.

The charges arise from a broad U.S. government crackdown on insider trading. Since October 2009, seventy-seven people have been charged by Bharara's office in that probe, and 71 have been convicted. The FBI and U.S. Securities and Exchange Commission are still investigating.

Raj Rajaratnam, 55, received an 11-year prison sentence in October 2011 after a jury convicted him the previous May.

He is appealing his conviction, as well as the government's use of wiretaps to obtain it. Wiretap evidence was also used in the case against Rengan Rajaratnam.   Continued...