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Brother of NY hedge fund founder pleads not guilty

Published on NewsOK Modified: March 25, 2013 at 1:23 pm •  Published: March 25, 2013

A Securities and Exchange Commission civil complaint went back further. It accused Rajaratnam of conspiring with his brother from 2006 to 2008 to indulge in insider trades that earned more than $3 million for himself and for hedge funds he managed at his brother's company and at Sedna Capital Management, a hedge fund advisory firm that he co-founded.

Like his brother, Rengan Rajaratnam was born in Sri Lanka, though the judge said his lawyers indicated he is a U.S. citizen but not a Sri Lanka citizen. Under the bail arrangements, he will live in Manhattan and undergo drug and psychological counseling while awaiting trial.

His lawyer said he was "mentally and physically drained" after the trip from Brazil but was "ready to face these charges."

Rengan Rajaratnam wore jeans and a dark suit coat to his initial court appearance, where he only said "not guilty, your honor" when he was asked how he would plead to the charges. He was freed immediately afterward and will be required to post $500,000 in cash or property as collateral in the next week.

Assistant U.S. Attorney David B. Massey said the government would normally ask that a defendant be held without bail when he was arrested after arrival from another country but decided not to seek detention because Rajaratnam returned to the United States so soon after hearing of the indictment and knowing he would be arrested upon his arrival.