Rajaratnam Brother An Alleged Co-Conspirator In Insider-Trading Case

Feb 2 2011 | 12:06pm ET

Prosecutors are turning up the heat on Galleon Group founder Raj Rajaratnam just weeks before he goes on trial for insider-trading: It has emerged that Rajaratnam's younger brother, Ragakanthan, is an unindicted co-conspirator identified in the most recent guilty pleas in the case.

The government has not publicly identified Ragakanthan Rajaratnam as "CC-1" in the charges against former Galleon trader Michael Cardillo. But The Wall Street Journal reports that the co-conspirator is, in fact, the former Galleon chief's brother.

Ragakanthan Rajaratnam has not been charged with any wrongdoing. But according to the Cardillo charges, the brothers Rajaratnam traded on confidential information about J.M. Smucker Co. and Procter & Gamble during Ragakanthan Rajaratnam's three years as a Galleon portfolio manager.

Cardillo, who pleaded guilty last week, worked for Ragakanthan Rajaratnam and executed his trades, according to the charges against him.

Ragakanthan Rajaratnam, known as "R.K." during his Galleon days, is now a vice president in Clorox Co.'s marketing department. He worked at General Mills, Kraft Foods and ConAgra Foods before joining Galleon in 2006.

Raj Rajaratnam's trial on 14 insider-trading counts is set to begin on Feb. 28. In the last few weeks, prosecutors have moved to isolate the biggest fish they've nabbed in the whole investigation, winning guilty pleas from his former co-defendant, Danielle Chiesi, and two former Galleon traders, including Cardillo. All told, 19 people have pleaded guilty in the case; seven, including Rajaratnam, are fighting the charges.

The government has also turned up the heat on Rajaratnam's other brother, Regnan, another former Galleon employee. In December, John Kinnucan, the research firm chief who publicly rejected a Federal Bureau of Investigation offer to cooperate in the investigation, said he received a subpoena seeking information about Sedna Capital Management, a now-defunct hedge fund founded by Regnan Rajaratnam.

It is unclear whether prosecutors intend to pursue charges of any kind against either Ragakanthan or Regnan Rajaratnam, or if they hope the increased pressure will convince Raj Rajaratnam to seek a plea deal.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of