The Federal Bureau of Investigation recently announced that conspiracy and securities fraud charges had been alleged against Rajarengan (“Rengan”) Rajaratnam, a former portfolio manager at a hedge fund firm. Charges relate to Rengan Rajaratnam’s alleged involvement in an insider-trading scheme. Rengan Rajaratnam allegedly conspired with his brother to trade on the basis of material, non-public information concerning two companies in 2008.
In a separate action, the United States Securities and Exchange Commission announced civil charges against Rengan Rajaratnam, too.
Rengan Rajaratnam has been charged with one count of conspiracy to commit securities fraud and six counts of securities fraud. The conspiracy charge carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud charges each carry a maximum potential penalty of 20 years in prison and a maximum fine of $5 million.
Rengan Rajaratnam’s brother, Raj Rajaratnam, was found guilty of conspiracy and securities fraud charges in 2011. He is currently serving an 11-year prison sentence. Two people accused of sharing insider information pled guilty pursuant to cooperation agreements and were sentenced to two years of probation in 2012.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Have you been victimized by deceptive or negligent investment brokers or corporate managers? Call Dallas securities fraud lawyer Mazin A. Sbaiti at 214-432-2899.