US says Rajaratnam brother was co-conspirator - WSJ

Thursday, 3 February 2011 00:49 - - {{hitsCtrl.values.hits}}

NEW YORK (Reuters) - U.S. prosecutors contend that a younger brother of Galleon Group hedge fund founder Raj Rajaratnam was a co-conspirator in a wide-ranging insider trading case, the Wall Street Journal reported on Wednesday.

Prosecutors have not publicly disclosed any accusations of wrongdoing against Ragakanthan Rajaratnam, a Clorox Co executive who previously worked at Galleon.

His brother, Raj Rajaratnam, has pleaded not guilty to criminal insider trading charges, and is set to go on trial on Feb. 28.

The Journal, citing unspecified people familiar with the matter, said Ragakanthan Rajaratnam is the co-conspirator identified as “CC-1” in court filings related to charges against former Galleon trader Michael Cardillo.

Ragakanthan Rajaratnam is not mentioned in the documents by name.

Cardillo pleaded guilty in Manhattan federal court last week, admitting to improper stock trades based on confidential company information.

A message left for Ragakanthan Rajaratnam on his voice mail at Clorox was not immediately returned.

At Oakland, California-based Clorox, Ragakanthan Rajaratnam is a vice president of global insights, a group within the marketing division that researches consumer needs and innovation strategy, said company spokeswoman Kathryn Caulfield. She declined to make any further comment.The U.S. attorney’s office in Manhattan declined to comment.

Ragakanthan Rajaratnam worked at Galleon between 2006 and 2009 as a portfolio manager, the Journal said.

The Sri Lankan-born Raj Rajaratnam was arrested in October 2009. So far, the government has charged more than two dozen former hedge fund managers, traders and others in the trading probe.