NEW YORK, July 17 The U.S. Securities and Exchange Commission and Rengan Rajaratnam, the younger brother of convicted Galleon Group founder Raj Rajaratnam, on Thursday asked a judge to stay the regulator's civil lawsuit for 60 days while they try to reach a deal.
In a joint letter filed in Manhattan federal court Thursday, lawyers for both parties asked U.S. District Judge John Koeltl to keep the regulator's insider trading case on hold while they "discuss resolving the pending litigation."
The request was filed nine days after a jury in the same courthouse acquitted Rengan Rajaratnam, 43, of conspiring with his brother to engage in insider trading following a three-week criminal trial.
Koeltl had frozen the civil case while the criminal prosecution remained pending.
An SEC spokeswoman declined to comment. Daniel Gitner, Rajaratnam's defense lawyer, did not immediately respond to a request for comment.
Prosecutors had accused Rengan Rajaratnam, a former portfolio manager at Galleon, of participating in an insider trading scheme with his brother involving technology companies Clearwire Corp and Advanced Micro Devices Inc in 2008.
The SEC lawsuit included some of the same allegations but also contended Rengan Rajaratnam engaged in a broader scheme involving additional stocks and trading during his time at Sedna Capital Management, a fund he founded.
The acquittal for Rajaratnam represented the first loss in more than 80 insider trading cases brought by Manhattan U.S. Attorney Preet Bharara since 2009 as part of a major crackdown.
Raj Rajaratnam, 57, was found guilty at trial in 2011 and is serving an 11-year prison sentence.
The case is SEC v. Rajarengan Rajaratnam, U.S. District Court for the Southern District of New York, No. 13-cv-1894. (Reporting by Joseph Ax; Editing by Richard Chang)