Fund founder Rajaratnam's brother faces U.S. insider trading trial

Mon Jun 16, 2014 1:14am EDT
 
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By Nate Raymond

NEW YORK (Reuters) - In 2011, former billionaire and hedge fund manager Raj Rajaratnam was convicted for insider trading and sentenced to 11 years in prison.

When his younger brother goes to trial on Tuesday in his own insider trading trial in New York, he hopes for a better fate.

U.S. prosecutors accuse Rengan Rajaratnam, a former portfolio manager at Raj Rajaratnam's Galleon Group, of engaging in an insider trading scheme with his brother involving technology companies Clearwire Corp and Advanced Micro Devices Inc AMD.N in 2008.

Daniel Gitner, his lawyer, declined comment. He has argued prosecutors lacked evidence Rengan Rajaratnam, 43, knew any inside information was disclosed for a personal benefit.

A guilty verdict would continue an unbroken insider trading trial winning streak for Manhattan U.S. Attorney Preet Bharara's office, which has secured convictions of 81 people since October 2009.

Jurors are expected to hear recordings of FBI wiretaps, which featured prominently in the trial of Raj Rajaratnam.

According to the indictment, in March 2008, Rajiv Goel, a then-Intel Corp INTC.O executive, learned the company planned to invest $1 billion in Clearwire. Raj Rajaratnam passed on the information to his brother, who later called him to complain when a news report of the deal surfaced, prosecutors said.

"So I don't know how much you got in today," Rengan Rajaratnam told him, according to the indictment, "but I think (Clearwire's share price) is gonna rip tomorrow."   Continued...

 
Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, departs Manhattan Federal Court in New York, March 25, 2013. REUTERS/Brendan McDermid