Thursday, 27 October 2016
Last updated 1 hour ago
May 5 2014 | 10:45am ET
The prosecutors leading the case against Galleon Group founder Raj Rajaratnam’s brother have seen the writing on the wall.
The U.S. Attorney’s Office in Manhattan said it would drop the two counts against Rengan Rajaratnam that U.S. District Judge Naomi Reice Buchwald in March called “very strained.” The allegations dealt with Galleon’s purchase of Clearwire Corp. shares in 2008.
Buchwald declined to dismiss those charges last month, allowing prosecutors to decide whether to proceed. They chose not to, they said in a letter to Buchwald on Thursday.
Rengan Rajaratnam was charged last year with conspiring with his brother, who is serving an 11-year prison sentence, to illegally trade shares of Clearwire and Cisco Systems. He denies the allegations, arguing that prosecutors failed to allege that his supposed tipsters benefitted personally by passing confidential information.
The two dropped charges leave five remaining against Rajaratnam. Buchwald last month denied his request to dismiss all of the charges.