Posted Jul 08, 2014 08:15 pm CDT
Hedge fund co-founder Raj Rajaratnam made headlines several years ago after being convicted in a high-profile insider-trading trial, sentenced to a then-record 11-year prison term and ordered to pay more than $90 million in restitution and civil and criminal penalties.
On Tuesday his younger brother, Rengan Rajaratnam, made headlines for a different reason: He is the first of at least 88 defendants charged in a Manhattan-based federal insider trading crackdown to beat the rap, Bloomberg and Reuters report.
Originally indicted in March 2013 on charges that he conspired with his brother and six counts of securities fraud, the 43-year-old Rengan Rajaratnam was acquitted on the conspiracy count today by a federal jury in New York.
U.S. District Judge Naomi Reice Buchwald dismissed two securities fraud charges during trial after the prosecution finished presenting its case, and the government dropped four other counts prior to trial.
U.S. Attorney Preet Bharara said his office is disappointed by the verdict but respects the jury system, Bloomberg reports. So far, at least 81 of the 88 defendants charged have pleaded guilty or been convicted.
Attorney Daniel Gitner represented Rengan Rajaratnam. He said his client was manipulated by his older brother. Gitner also argued that the government didn’t prove his client’s knowledge of the scheme and relied on evidence against Raj Rajaratnam when pursuing the case against Rengan Rajaratnam.