Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, is negotiating with prosecutors on a possible resolution to his criminal insider trading case, including a possible plea.
U.S. District Judge Naomi Reice Buchwald in Manhattan agreed to delay a scheduled conference to July 30 from June 4, which federal prosecutors in a May 30 letter said would “permit the defendant and the government to continue discussions that may lead to the resolution of this case before trial.”
Prosecutors said they had already provided trading records, wiretap transcripts and other “significant” evidence to Rengan Rajaratnam “to facilitate plea discussions,” and that both sides “agree that it would be very helpful to have additional time for these discussions.”
Prosecutors had accused Rengan Rajaratnam of conspiring with his brother to trade illegally in the stocks of technology companies Advanced Micro Devices Inc. and Clearwire Corp. in 2008, resulting in $1.2 million of illegal profit.
Rengan Rajaratnam pleaded not guilty on March 25, entering his plea after voluntarily returning to the United States from Brazil, where he had lived and worked for the prior year.
He was freed on $1 million bond and surrendered his passport. The defendant is a U.S. citizen born in Sri Lanka.
Rengan Rajaratnam, whose full first name is Rajarengan, had been a portfolio manager at his brother’s hedge fund firm Galleon Group. He also faces separate U.S. Securities and Exchange Commission civil charges.
Prosecutors have charged close to 80 people and won convictions or guilty pleas on more than 70 in an insider trading probe that was unveiled in October 2009 and which has focused on hedge fund employees and corporate executives.
Raj Rajaratnam is serving an 11-year prison sentence. Rajat Gupta, a former McKinsey & Co. consulting firm chief and Goldman Sachs Group Inc. director, was sentenced to two years in prison for passing tips to Raj Rajaratnam. Both are appealing their convictions.