The brother of a jailed one-time billionaire hedge fund boss has been charged with conspiring with him to cheat on Wall Street and earn nearly $1.2 million illegally, federal authorities announced Thursday.
Rengan Rajaratnam, 42, of Manhattan, was charged in an indictment unsealed Thursday with conspiracy to commit securities fraud and six counts of securities fraud. He was not immediately arrested and is believed to be in Brazil, a person familiar with the matter told Reuters.
His brother, Raj Rajaratnam, is serving an 11-year prison sentence after he was convicted in 2011 of earning up to $75 million by swapping secrets about public companies with other hedge fund managers and friends at public companies.
"As alleged, Rengan Rajaratnam and his brother shared more than DNA, they also shared a penchant for insider trading," U.S. Attorney Preet Bharara said. "Along with his brother Raj, Rengan Rajaratnam was allegedly at the heart of an insider-trading scheme that swept up an unprecedented number of people in its web of corruption, and with his indictment we are one step closer to closing that chapter."
George Venizelos, head of the New York FBI office, said Rengan Rajaratnam's "career arc has descended to the same place his brother's did less than four years ago: defendant."
Phone and email messages left for Rengan Rajaratnam's attorney were not immediately returned. Separately, civil charges were brought against Rengan Rajaratnam by the U.S. Securities and Exchange Commission.
According to the indictment in U.S. District Court in Manhattan, the Rajaratnam brothers conspired in 2008 to trade on insider information involving Clearwire Corp. and Advanced Micro Devices Inc.