NEW YORK – Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, on Monday pleaded not guilty to insider trading charges.
The younger Rajaratnam entered his plea in Manhattan federal court, one day after his arrest at John F. Kennedy International Airport in New York. FBI agents had escorted him to the United States on a flight from Brazil.
Prosecutors on Thursday accused Rengan Rajaratnam, 42, of conspiring with his brother to trade on non-public information concerning Clearwire Corp and Advanced Micro Devices Inc in 2008.
Lawyers for Rengan Rajaratnam on Monday said their client learned through news reports that he had been charged, and volunteered to return immediately from Brazil, where he had lived and worked for the past year, to defend himself.
The lawyers, David Tobin and Vinoo Varghese, said their client "looks forward to clearing his name."
Rengan Rajaratnam, whose full first name is Rajarengan, was a portfolio manager at the hedge fund Galleon Group, and the trades for which he was charged resulted in nearly $1.2 million of illegal profit, according to prosecutors.
The defendant 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 also faces separate U.S. Securities and Exchange Commission civil charges. These allege a broader scheme that netted $3 million in illicit gains following trades on stocks including Polycom Inc and Hilton Hotels.
Rengan Rajaratnam's arrest is the latest in a sweeping crackdown on insider trading by the U.S. government.
The office of U.S. Attorney Preet Bharara in Manhattan said it has charged 77 people in its investigation since October 2009, 71 of whom have since been convicted.
Raj Rajaratnam, 55, received an 11-year prison sentence in October 2011 after a jury convicted the former billionaire the previous May.
The cases are U.S. v. Rajaratnam, U.S. District Court, Southern District of New York, No. 13-cr-00211; and SEC v. Rajaratnam in the same court, No. 13-01894.
(Reporting By Bernard Vaughan, Nate Raymond; Editing by Kenneth Barry, Benrard Orr)