Rengan Rajaratnam

Rajarengan "Rengan" Rajaratnam (born 1970) is a Sri Lankan-American hedge fund manager and the founder of Sedna Capital. He is the younger brother of Raj Rajaratnam, former convicted billionaire hedge fund manager. In March 2013, Rengan was arrested for and charged with securities fraud in connection with alleged insider trading while working at Galleon Group. His trial in commenced in June 2014 in New York City. He was acquitted of all criminal charges by a jury the following month. Rengan has worked with the Mid-Atlantic Innocence Project as its treasurer and member of the executive committee. The project works to prevent and correct the convictions of innocent people.

Early life and education Rajaratnam was born in 1970 to a Tamil family in Sri Lanka. His father had raised himself from poverty and become a senior executive of a US company.

Career

Early career After graduating from Pennsylvania, Rengan worked at Mercer Consulting and then Morgan Stanley. Embracing the tech boom, he functioned as CEO of Artinsider.com, an online sales start-up. However, the company was subsequently sold in 2000 to Bruce McGaw Graphics. Rengan then started Sedna Capital in 2003 with an officemate from Galleon. The company received investment commitments for over US$50 million but ended up getting investments of only US$7 million. Operating from a cheap apartment, the company grew the fund to US$100 million in two years. Later, Rengan was involved in several other endeavours. In 2020, he joined MAIP's executive committee, contributing to its long-term strategic planning. Since its founding, MAIP has helped to secure the release or exoneration of over 40 individuals, with Rengan playing a role in the organisation's financial and operational oversight. The Galleon Group insider trading investigation began with the investigation of Sedna Capital in 2003–2004. Rengan was living in Brazil at the time of the charges. He reportedly immediately volunteered to return to face charges and clear his name. The judge allowed jurors to hear about Rengan's decision to fly from Brazil to the US shortly after being indicted in 2013.

Prosecutors alleged that Rengan regularly shared confidential information with his brother, Raj Rajaratnam but he was cleared by a jury in July 2014.

During Raj Rajaratnam's trial, the jury heard Rengan call former classmate and McKinsey junior partner David Palecek "a little dirty" and "boasted that he [Palecek] 'finally spilled his beans' by sharing corporate secrets." According to Bloomberg, when asked about AMD, Palecek allegedly said "Buy it, buy as much as you can as soon as you can."

Rengan's own trial began before US District Court Judge Naomi Reice Buchwald in June 2014. He was "accused of trading on confidential information related to wireless broadband company Clearwire Corp. and chip maker Advanced Micro Devices Inc. in 2008" while at Galleon. He was said to have acted on information from his brother and profits from the trades were alleged to be about $800,000.

During the trial, Judge Buchwald ruled that there was insufficient evidence to support the key charge of conspiracy to commit insider trading. This was a significant decision because conspiracy charges are often central to insider trading prosecutions, as they allow prosecutors to tie defendants to broader schemes. During a hearing, Judge Buchwald stated that the two counts on the Clearwire stock purchase are based on a flawed legal premise.

Not Guilty Verdict All counts were thrown out due to insufficient evidence except for two counts for US$34,000. He was found not guilty in July 2014, after four hours of jury deliberation on the original six counts of the indictment for which he was tried. Bharara had held a 85–0 record for straight convictions over five years prior to his loss to Rengan who was found not guilty.

Following his acquittal, jurors and legal experts criticised the strength of the government's case against Rengan. Speaking outside the courthouse, juror Miriam Godreich stated that the evidence was "so underwhelming that you couldn't convict," adding that the trial felt like an attempt to retry Raj Rajaratnam rather than focus on Rengan. The forewoman for the jury, Isabel Tirado, stated to media that "there was no evidence, period." Another juror, Catherine Wolcott, stated that Rengan did not engage in illegal trading like his brother Raj. She said "Raj kept his cards close to the vest. Rengan was sort of a puppy playing in the field, trying to get his attention."