Published March 25, 2013
NEW YORK – Rengan Rajaratnam was arrested Sunday at John F. Kennedy International Airport in New York after FBI agents escorted him on a flight from Brazil, a spokesman for the agency said on Monday.
Rajaratnam, 42, was indicted Thursday on insider trading charges. Prosecutors said he conspired with his older brother, Raj Rajaratnam, to trade on non-public information concerning Clearwire Corp and Advanced Micro Devices Inc in 2008.
Rengan Rajaratnam is expected to be arraigned in New York on Monday, according to the Manhattan U.S. Attorney's Office.
Lawyers for Rengan Rajaratnam said in a statement Monday that their client learned through news reports last week that he had been charged with securities fraud.
"After reading about his indictment, Mr. Rajaratnam immediately volunteered to return from Brazil, where he had been living and working for the past year, in order to defend himself," the attorneys, David Tobin and Vinoo Varghese, said in the statement.
The lawyers said Rajaratnam denies the charges and "looks forward to clearing his name."
Rengan Rajaratnam 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 U.S. Securities and Exchange Commission charges
Raj Rajaratnam, 55, received an 11-year prison sentence in October 2011 after a jury convicted him 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)