For prosecutors, the trial of Raj Rajaratnam's younger brother is off to a rocky start, even before it actually begins.
The federal judge presiding over the insider-trading case against Rengan Rajaratnam suggested that two of the seven counts against the former Galleon Group employee are based on a "very strained" argument and should be dismissed ahead of the June trial. U.S. District Judge Naomi Reice Buchwald yesterday said the counts related to Raj Rajaratnam's purchase of Clearwire Corp. shares in 2008 were based on a flawed reasoning.
The judge directed prosecutors to "discuss it with others at a higher pay grade."
Rengan Rajaratnam was charged last year with conspiring with his brother to illegally trade shares of Clearwire and Cisco Systems. He denies the allegations and has asked for all of the counts to be dismissed, arguing that prosecutors failed to allege that his supposed tipsters benefitted personally by passing confidential information.
Buchwald said she would rule on that motion at a later date.