Rajarengan "Rengan" Rajaratnam, 42, of Manhattan, was charged by the Federal Bureau of Investigation (FBI) and the US Securities and Exchange Commission (SEC) with conspiracy to commit securities fraud and six counts of securities fraud.
A former portfolio manager at the hedge fund management firm Galleon Group, Rengan Rajaratnam, was charged in an indictment returned Wednesday and unsealed a day later but has not yet been arrested on these charges.
"As alleged, Rengan Rajaratnam and his brother shared more than DNA, they also shared a penchant for insider trading. Along with his brother Raj, Rengan Rajaratnam was allegedly at the heart of an insider trading scheme that swept up an unprecedented number of people in its web of corruption, and with his indictment, we are one step closer to closing that chapter," US Attorney Preet Bharara said.
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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.
In addition to illegally trading on inside tips, Rengan Rajaratnam was an active participant in his brother's scheme to cultivate highly placed sources and extract confidential information for an unfair advantage over other traders, SEC alleged.