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Federal judge sets hedge fund founder criminal trial for October

[JURIST] A federal judge on Thursday decided that the criminal trial of Galleon Group [partnership website] hedge fund founder Raj Rajaratnam [FT profile; JURIST news archive] will begin October 25. Prosecutors had asked the judge to schedule the trial for June or July [Bloomberg report], but Rajaratnam and former hedge fund consultant Danielle Chiesi asked for more time to prepare a defense, saying it would be impossible to prepare fully by June or July. The judge noted that while he was pushing the trial back, he wants the criminal trial to take place before the civil trial. Rajaratnam agreed to move the civil trial back to accommodate.

Former Intel Capital [corporate website] executive Rajiv Goel pleaded guilty [JURIST report] to insider trading charges in connection with the Galleon probe earlier this month. In January, federal prosecutors indicted [JURIST report] seven more individuals in connection with the case. Rajaratnam and Chiesi were arrested in October and charged [complaint, PDF] along with four other individuals and two business entities with insider trading. The complaint alleged that the individuals provided Galleon Group and another hedge fund with material nonpublic information about several corporations upon which the funds traded, generating $25 million in illicit gain. Rajaratnam and Chiesi pleaded not guilty in December after being indicted for insider trading [JURIST reports].

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