Monday, 28 July 2014
Last updated 2 days ago
Jul 7 2014 | 8:33am ET
Raj Rajaratnam’s younger brother is so convinced of his innocence that he raced to return to the U.S. to face insider-trading charges that could have sent him to prison for decades, his friends testified last week.
Rengan Rajaratnam lived in Brazil at the time of his indictment. But rather than force the U.S. to seek his extradition, he immediately made plans to return to the U.S. and, in fact, did so within days, his former roommate in Rio de Janeiro told a jury on Thursday.
“He was innocent, he wanted to come back and take it to court,” Husseni Rasiwala said. Another friend, Sanjay Agarwal, echoed that story: “He said, ‘They’re coming after me and I haven’t done anything wrong. I have to go and prove my innocence.’”
The case against Rajaratnam, accused of conspiring with his brother to trade shares of two technology companies, has since been whittled down to a single charge that carries a maximum of five years in prison.
Rajaratnam’s lawyers didn’t rely solely on evidence of their client’s clean conscience. They also called a former analyst who worked with Rajaratnam both at his brother’s firm, Galleon Group, and at his own hedge fund, Sedna Capital Management.
“At the beginning of every meeting or phone call” with corporate insiders “he would say, ‘We’re not interested in material nonpublic information,’” Luke Sito testified. “That was a disclosure he made on every single call and every single meeting.”
Prosecutors pressed Sito on a letter he wrote in support of Raj Rajaratnam during the sentencing phase of his trial. “I supported him,” Sito said, citing his gratitude to the elder Rajaratnam. “He crossed the line when it came to insider-trading, but he donated a ton of money to charity. Galleon was known as the United Nations of hedge funds, up and down Wall Street. You had a Pakistani guy sitting next to an Indian guy. He gave a little guy like me a chance.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…