Rengan Rajaratnam, who was acquitted in a criminal insider trading case earlier this year, agreed to pay a penalty of less than $1 million to securities regulator to settle a related civil lawsuit.
The Securities and Exchange Commission (SEC) said on Thursday that Rajaratnam had agreed to pay a little more than $840,000 in fines and restitution. Rajaratnam also agreed to a provision that would bar him from working in the securities industry. "The SEC elected to offer, and Rengan elected to accept, a no admit/no deny settlement," said Daniel Gitner, a lawyer for Rengan. "Rengan is moving on to the next phase of his life. If the SEC has further comment, so will we."
The civil settlement comes more than three months after a federal jury in Manhattan found Rajaratnam not guilty of a single-count of conspiracy to commit insider trading. The verdict, which the jury reached in less than four hours of deliberation, was the first courtroom defeat for Preet Bharara, the United States attorney in Manhattan, in his long crackdown on insider trading in the hedge fund industry.
Rajaratnam is a younger brother of Raj Rajaratnam, a founder of the Galleon Group hedge fund, who was convicted in 2011 of insider trading and is serving an 11-year prison sentence. Federal authorities had accused the younger Rajaratnam of seeking to get inside information while working at Galleon.
In settling with regulators, Rengan Rajaratnam neither admitted nor denied the allegations in the civil lawsuit. The settlement is subject to the approval of a federal judge. Rajaratnam can apply for readmission to the securities industry in five years.
"The settlement ensures he's out of the industry and paying a serious price for breaking the law," said Andrew J Ceresney, the SEC's director of the division of enforcement.
©2014 The New York Times News Service
