NEW YORK, N.Y. – A jury was chosen Tuesday for the insider trading trial of the brother of an imprisoned onetime billionaire hedge fund founder.
Opening statements were scheduled for Wednesday in the case brought against Sri Lankan-born Rengan Rajaratnam, three years after his brother was convicted in Manhattan federal court on insider trading charges.
The brother, Raj Rajaratnam, is serving an 11-year prison sentence. On Monday, the Supreme Court declined to hear further appeals.
Rengan Rajaratnam, 43, has pleaded not guilty to securities fraud charges. He won a victory in the case in May when the government dropped two of five charges against him. Charges of conspiracy to commit securities fraud and two counts of securities fraud remain.
The charges against him are an extension of charges brought against his brother and two dozen other defendants who pleaded guilty or were convicted.
Prosecutors made extensive use of wiretaps in an insider trading case for the first time during the federal probe, which began more than six years ago.
The use of the wiretaps was challenged repeatedly by lawyers for other defendants, but multiple judges and the 2nd U.S. Circuit Court of Appeals ruled that they were properly used. In rejecting requests by Rengan Rajaratnam’s lawyers to suppress the recorded conversations, Forrest noted that the arguments had been “squarely rejected” by the appeals court.
The judge has ruled that Rajaratnam’s lawyers can tell jurors about his speedy return to the United States from his home in Brazil when he learned of the charges against him last year.
The government had sought to keep that evidence out of the trial while defence lawyers want to introduce it as proof that he wanted to face the charges because he believed he is innocent.
He has been free on $1 million bail while awaiting trial.
A civil complaint brought by the Securities and Exchange Commission has accused Rajaratnam of conspiring with his brother from 2006 to 2008 to indulge in insider trades that earned more than $3 million for himself and for hedge funds he managed at his brother’s company and at Sedna Capital Management, a hedge fund advisory firm that he co-founded.