New York: Rengan Rajaratnam, the younger brother of convicted Galleon Group founder Raj Rajaratnam, was cleared on Tuesday of conspiring to engage in insider trading while at the hedge fund, ending a five-year winning streak by US prosecutors.
A federal jury in New York found Rengan Rajaratnam, a former portfolio manager at Galleon, not guilty of the one conspiracy count he faced following the mid-trial dismissal by a judge of two more serious fraud charges.
The verdict came more than three years after jurors in the same courthouse convicted Raj Rajaratnam, 57, for engaging in insider trading in a scheme that resulted in $63.8 million in illicit profit, earning him an 11-year prison sentence.
Before Tuesday, a crackdown on insider trading led by Manhattan US Attorney Preet Bharara`s office had resulted in the conviction of 81 individuals in consecutive cases since October 2009.
"While we are disappointed with the verdict on the sole count that the jury was permitted to consider, we respect the jury trial system whatever the outcome, and we thank the jury for their service," Bharara said in a statement after the verdict.
The acquittal followed significant setbacks in the prosecution of Rengan Rajaratnam, who when first indicted in March 2013 faced six counts of securities fraud and the conspiracy charge.
Four securities fraud charges were dropped pre-trial, including two that US District Judge Naomi Reice Buchwald called inconsistent with other parts of the indictment. Buchwald dismissed another two fraud counts for lack of evidence after the prosecution rested.
