Rajaratnam's brother charged in Wall St insider case
US prosecutors unveiled insider trading charges Thursday against the
brother of disgraced hedge fund manager Raj Rajaratnam in the latest
chapter of a giant Wall Street fraud investigation. The U.S. Attorney's
Office for the Southern District of New York said Rajarengan Rajaratnam
was charged with conspiracy and securities fraud related to technology
stocks in 2008.
Rajaratnam was a portfolio manager at the Galleon Group hedge fund
founded by his high-flying brother, who was arrested after a sprawling
probe that included wiretaps on telephones and snared dozens of people.
The elder Rajaratnam is currently in the second year of an 11-year
prison sentence.
The two Rajaratnams conspired "to trade on the basis of material,
non-public information... concerning Clearwire Corp. and Advanced Micro
Devices, Inc. in 2008, earning nearly $1.2 million in profits," the
prosecutor's office said in a statement.
Rajarengan Rajaratnam has not yet been arrested, prosecutors said,
although they would not confirm a New York Times report that he is in
Brazil. He also faces civil charges from the Securities and Exchange
Commission (SEC), which said he earned more than $3 million in "illicit
gains" through both his work at Galleon and a hedge fund advisory firm
he founded called Sedna Capital Management.
Raj Rajaratnam, once a star of the hedge fund industry, was convicted
on all 14 counts of insider trading while at Galleon, which managed some
$7 billion in funds.
FBI Assistant Director George Venizelos said "Rengan Rajaratnam's
career arc paralleled his brother's. He followed in Raj's footsteps by
obtaining an MBA from a top-flight business school. He went to work for
Raj at Galleon. As alleged in the indictment, Rengan also engaged in the
same illegal conduct as Raj.
AFP
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