| NEW YORK, July 8
NEW YORK, July 8 Jurors began deliberating on
Tuesday in the trial of Rengan Rajaratnam, younger brother of
Galleon Group hedge fund founder Raj Rajaratnam, who prosecutors
say conspired to engage in insider trading.
The federal jury in New York will weigh Rajaratnam's guilt
on a single conspiracy count, after a judge last week dismissed
two more charges that the former Galleon Group fund manager
engaged in securities fraud by trading on inside information.
Four other securities fraud charges were dropped before the
trial began, including two that U.S. District Judge Naomi Reice
Buchwald said were "inconsistent" with other sections of the
The jury of four men and eight women includes a history
professor, an auto parts delivery driver, a literary agent and a
New York City sanitation worker.
Prosecutors contend that Rajaratnam, 43, engaged in an
insider trading scheme with his brother involving technology
companies Clearwire Corp and Advanced Micro Devices Inc
Prosecutors had argued he earned $100,000 trading in
Clearwire based on a tip his brother received about a $1 billion
investment by Intel Corp.
But Buchwald dismissed securities fraud counts tied to that
allegation last week, citing a lack of evidence.
Regarding AMD, prosecutors said that in August 2008, Raj
Rajaratnam told his brother of a "handshake" deal between the
company and an Abu Dhabi state-owned company he learned about
from Anil Kumar, a McKinsey & Company partner.
In a wiretapped recording of a call that same day, Rengan
Rajaratnam told his brother he had talked with another McKinsey
partner, David Palecek, who was "a little dirty" and "kind of
volunteered the information on the investments."
Despite trading on the tip, Galleon sold AMD for a loss due
to overall market declines, prosecutors said. Rengan Rajaratnam
earned $40,000 personally trading AMD, they said.
Daniel Gitner, Rajaratnam's lawyer, has argued there was no
evidence his client knew about the tips or anything Raj
Rajaratnam gave the insiders in exchange for disclosing the
Raj Rajaratnam, 57, was convicted of insider trading charges
in 2011 and sentenced to 11 years in prison.
Kumar pleaded guilty to his role in the scheme and was
sentenced in 2012 to two years' probation. Palecek died in 2010,
and his lawyer has said there is no proof he agreed to provide
The case is U.S. v. Rajaratnam, U.S. District Court,
Southern District of New York, No. 13-00211.
(Additional reporting by Joseph Ax in New York; editing by
Noeleen Walder and Matthew Lewis)