Galleon Insider Trading: US Judge Dismisses Two Counts Against Rengan Rajaratnam

A US judge has dismissed two insider trading counts against Rengan Rajaratnam, the younger brother of Galleon Group founder Raj Rajaratnam who is serving an 11-year prison sentence after being convicted of insider trader.

The ruling, by US District Judge Naomi Buchwald, came after the US government rested its case against Rengan. The ruling cannot be appealed.

But Rengan, a former Galleon fund manager, still faces one count of conspiracy.

Judge Buchwald said the question was whether Rengan traded on inside information about wireless broadband firm Clearwire knowing the tipper violated his obligation to keep it secret and in exchange for a personal benefit.

"I find a reasonable jury could not so find," Buchwald said.

Buchwald adjourned without ruling on whether she will throw out the conspiracy count, though she indicated she likely will not, Reuters reported.

Pursued by the news agency, Rengan's lawyer Daniel Gitner and a spokesman for Manhattan US Attorney Preet Bharara refused to comment.

Allegations

Prosecutors had accused Rajaratnam of conspiring with his older brother to trade on inside information about Clearwire and chip maker Advanced Micro Devices (AMD) in 2008.

Prosecutors argued that a tip to Raj in March 2008 - that Intel was planning to inject $1bn in Clearwire - helped Galleon garner $700,000 while Rengan earned $100,000.

Raj, lodged at the Federal Medical Center-Devens in Ayer, Massachusetts, plans to request the US Supreme Court to review his conviction.

The Rengan case is US versus Rajaratnam, US District Court, Southern District of New York, No. 13-00211.