In a motion filed in U.S. District Court in New York, his lawyers
argued the government had taken positions in the indictment that
contradicted positions prosecutors took in trying his older brother
for insider trading.
"Principles of fairness dictate that Rengan, at a minimum, should be
tried under the same standard as Raj," the defense lawyers wrote in
A spokeswoman for U.S. Attorney Preet Bharara in Manhattan declined
The case is one of a wave of insider trading prosecutions pursued by
Bharara's office, resulting in 79 convictions since October 2009.
Raj Rajaratnam, the founder of the hedge fund Galleon Group,
received an 11-year prison sentence in October 2011 after a jury
convicted him charges related to insider trading.
A grand jury subsequently indicted Rengan Rajaratnam, a former
portfolio manager at Galleon, in March 2013 on seven counts of
conspiracy and securities fraud.
The indictment charged that Rengan Rajaratnam, 43, had conspired
with his older brother to trade on non-public information related to
technology companies Advanced Micro Devices Inc <AMD.N> and
Clearwire Corp in 2008, resulting in almost $1.2 million in profits.
In court papers Friday, Rengan Rajaratnam's lawyers contended the
indictment failed to allege that he knew that two alleged tippers of
inside information received a personal benefit in exchange for
providing tips to Raj Rajaratnam.
Those tippers were Rajiv Goel, an employee of Intel Corp <INTC.O>
who admitted to passing a tip to Raj Rajaratnam, 56, about the
company's plans to invest in Clearwire, and Anil Kumar, a former
McKinsey director who said he tipped the Galleon founder about AMD.
Both Goel and Kumar received probation in 2012 after pleading guilty
and agreeing to cooperate with the investigation.
[to top of second column]
Rengan Rajaratnam's lawyers said their client was allowed to trade
on confidential information unless he knew a tipper disclosed it for
a personal gain.
Allowing the indictment to stand without any allegation that
Rengan Rajaratnam himself knew the tippers were benefiting from
providing confidential information would be "unjust," the lawyers
say, since such proof was required at trial in the case of Raj
Trial in Rengan Rajaratnam's case is scheduled for June 17. His
lawyer did not respond to a request for comment.
A federal jury on Thursday found Mathew Martoma, a former portfolio
manager at SAC Capital Advisors, guilty of engaging in an insider
trading scheme that enabled the hedge fund to make profits and avoid
losses of $275 million.
Separately Friday, U.S. District Judge Paul Gardephe scheduled the
sentencing for Martoma, 39, for June 10. Martoma faces a maximum of
45 years in prison.
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 Nate Raymond in New York;
editing by Lisa Shumaker)
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