Rengam Rajaratnam, 42, brother "pleaded not guilty" before a New York court, where he was produced a day after his arrest at the John F Kennedy Airport on arrival from Brazil. Rajaratnam, was indicted last week by the Federal Bureau of Investigation and US Securities and Exchange Commission (SEC) on charges of insider trading.
A former portfolio manager at the hedge fund management firm Galleon Group Rengan is the younger brother of Raj Rajaratnam who in October 2011, was sentenced to 11 years in prison and fined a total criminal and civil penalty of over USD 150 million after being convicted in a massive insider trading case, the largest in the US history.
In a statement, his lawyer said that Rengam Rajaratnam, voluntarily surrendered after returning from Brazil yesterday to clear his name. "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 indictments alleged that Rajaratnam conspired with his brother, Galleon founder Raj Rajaratnam, to trade on the basis of material, non-public information concerning Clearwire Corp and Advanced Micro Devices Inc (AMD) in 2008, earning nearly USD 1.2 million in profits in the aggregate.
In a separate complaint, SEC alleged that from 2006 to 2008, Rengan Rajaratnam repeatedly received inside information from his brother and reaped more than USD 3 million in illicit gains for himself and hedge funds that he managed at Galleon and Sedna Capital Management, a hedge fund advisory firm that he co-founded.
Last year, former Goldman Director Rajat Gupta, the poster boy of Indians at the Wall Street, was also found guilty of illegally tipping off his friend Raj Rajaratnam of confidential market information.