Rengan Rajaratnam, the brother of a jailed one-time billionaire hedge fund boss, pleaded not guilty to federal charges Monday after rushing from his Brazil home to the U.S., learning he was embroiled in a massive insider trading prosecution, the Associated Press reported.
His brother Rajan Rajaratnam (or Raj) was indicted and received an 11-year prison sentence in 2011. When Rengan arrived in New York on Sunday morning, federal agents arrested him, but he was released on a $1 million bail after he appeared in court on Monday. Rajaratnam was charged with an indictment unsealed last week with conspiracy to commit securities fraud and five counts of securities fraud, similar to the the charges his brother received in a 2011 trial.
The U.S. government said his brother Raj had earned as much as $75 million illegally by trading or inside information provided by friends who were fellow money managers or corrupt employee or public companies.Rengan hoped to clear his name in the states, now that he found a job and built a life for himself in Brazil. He is resolute to clear his name.
"He's clearly gone above and beyond to prove his desire to face these charges," his attorney Vinoo Varghese said. But federal prosecutors have said that Rengan earned nearly $1.2 million illegally on 2008 trades involving Clearwire Corp. and Advanced Micro Devices Inc.
A Securities and Exchange Commission complained accused him of conspiring with his brother between 2006 and 2008 to indulge in insider trades, earning more than $83 million for himself and for hedge funds he managed at his brother's company, and at Sedna Capital Management, a hedge fund advisory firm that he co-founded. Insider trading involves trading of a corporation's stock, or other securities by individuals with access to non-public information about a company.
A hedge fund invests in a diverse range of markets, strategies and investment instruments.A crackdown on white-collar criminals is a common practice under U.S. laws and regulations.
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