NEW YORK: A US court on Tuesday cleared the brother of jailed hedge fund manager Raj Rajaratnam of insider trading in the Galleon Group scandal.
A former portfolio manager at the Galleon hedge fund founded by his older brother, Rengan Rajaratnam was charged last year with conspiracy and securities fraud related to trading in technology stocks in 2008.
Prosecutors had alleged he worked with Raj Rajaratnam to trade on insider information in Clearwire Corp. and Advanced Micro Devices, raking in $1.2 million in profit.
But a New York jury cleared Rengan Rajaratnam of the single charge against him, a rare setback for US attorney Preet Bharara, who prosecuted the original Galleon case.
Raj Rajaratnam, once a star of the hedge fund industry, was convicted in 2011 of 14 counts of insider trading, in a scheme which saw him obtaining corporate secrets from Rajat Gupta, a top official at McKinsey & Co. and a Goldman Sachs board member.
Raj Rajaratnam received an 11-year-jail sentence and was fined $64 million. In a statement Bharara said he was disappointed with the verdict.
"This office maintains its faith in the criminal justice system, a system that has resulted in the convictions by trial or guilty plea of 85 other defendants on insider trading charges. We will continue to seek justice in the investigation and prosecution of those who violate the securities laws of the United States."
Comments
Comments are closed for this article.