MANHATTAN (CN) - A federal jury found Rengan Rajartnam not guilty Tuesday of the charges that brought down his older brother, Galleon Group founder Raj Rajaratnam.
The elder Rajaratnam is serving 11 years in prison after his October 2011 insider-trading conviction. Rengan Rajaratnam, who worked for Raj as a portfolio manager at Galleon, was charged in March 2013 with seven counts of conspiracy and securities fraud.
Prosecutors said Raj Rajaratnam got insider information from Rajiv Goel and Anil Kumar on stock of Clearwire Corp. and Advanced Micro Devices, then supplied the information to his younger brother, who traded on the information in his personal brokerage account at Fidelity Investments and other Galleon Group funds.
Though U.S. District Judge Naomi Reice Buchwald refused to dismiss the charges against Rengan Rajaratnam earlier this year, only the conspiracy count went to the jury last week.
After the jury returned its not-guilty verdict Tuesday afternoon, Judge Buchwald made a quip about the World Cup site where Rengan had been hanging his hat before his indictment.
"You can go back to Brazil for the finals," Buchwald asked.
Rengan replied: "Absolutely."
His lawyer, Daniel Gitner of the New York-based firm Lankler Siffert & Wohl LLP, read a brief statement to reporters.
"As I told the jury, today is the day Rengan has been waiting for," he said. "We thank the jury for its careful attention. Rengan looks forward to getting on with his life."
U.S. Attorney Preet Bharara expressed his office's dismay over the ruling.
"While we are disappointed with the verdict on the sole count that the jury was permitted to consider, we respect the jury trial system whatever the outcome, and we thank the jury for their service," Bharara said in a statement. "This office maintains its faith in the criminal justice system, a system that has resulted in the convictions by trial or guilty plea of 85 other defendants on insider trading charges. We will continue to seek justice in the investigation and prosecution of those who violate the securities laws of the United States."
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