The US Securities and Exchange Commission (SEC) has sued Rajarengan ‘Rengan’ Rajaratnam for his alleged role in the insider trading case managed by Raj Rajaratnam and hedge fund advisory firm Galleon Management.
The watchdog accused Rengan for receiving secret information frequently from Raj, his elder brother, and subsequently gaining more than $3m in illicit profits, during 2006 to 2008.
Rajaratnam constantly received secret insider tips from his brother and executed illegal trading in the securities of Polycom, Hilton Hotels, Clearwire Corporation, Akamai Technologies, and AMD, according to the SEC’s complaint filed in federal court in Manhattan.
SEC enforcement division acting director said, "Our complaint against Rengan Rajaratnam tells a sad tale of a man who followed his brother down an illegal path of greed to its inevitable conclusion."
In a similar action, the US Attorney’s office for the Southern District of New York launched a criminal case against Rengan Rajaratnam.
The SEC’s complaint seeks a permanen ban on Rajaratnam from future violations of the federal securities laws, ordering him to disgorge his ill-gotten gains and prejudgment interest, as well as pay financial penalties.