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Federal judge dismisses two counts against Rengan Rajaratnam in insider trading trial

[JURIST] A judge for the US District Court for the Southern District of New York [official website] on Tuesday dismissed two securities fraud counts against Rengan Rajaratnam, the brother Raj Rajaratnam [JURIST news archive], the founder of the now defunct Galleon Group [JURIST news archive]. US District Judge Naomi Reice Buchwald ruled [Reuters report] that a reasonable jury would not be able to find that the former fund manager traded stock in the technology company Clearwire Corp. (now owned by Sprint) on insider information from former Intel executive Rajiv Goel. The two counts each carried a maximum sentence of 20 years in prison. Rengan still faces five years on a conspiracy count. In March 2013 Rengan pleaded not guilty [JURIST report] to charges of conspiring with his brother to trade on non-public information concerning Clearwire Corporate and Advanced Micro Devices Incorporated (AMD) [corporate website] in 2008.

Raj Rajaratnam's case has been called the largest hedge fund insider trading case in US history, and his sentence is the longest term ever imposed for insider trading. The 11-year sentence [JURIST report] was significantly lower than the 24 1/2-year sentence requested by prosecutors and less than the 19 1/2-year minimum indicated by the non-obligatory federal sentencing guidelines. In June of last year the US Court of Appeals for the Second Circuit [official website] affirmed the conviction [JURIST report] of Raj Rajaratnam, rejecting his argument that wiretap evidence was used improperly to convict him.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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