Sri Lankan Tamil-origin billionaire Raj Rajaratnam has pleaded not guilty before a court here to running an insider trading scam that allegedly racked upto $21 million in profits, the biggest such case in the U.S.
Mr. Rajaratnam, founder of the Galleon Group and hedge fund operator, is accused of operating an elaborate insider trading operation in tech and other stocks through his hedge fund. The scam is said to be the biggest hedge-fund insider trading case in the U.S.
Four Indian-Americans have also been charged in the case.
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“Rajaratnam is innocent, and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence,” his lawyer John Dowd was quoted as saying. He is also accused of providing financial support to a charity linked to the LTTE.
On bail, Mr. Rajaratnam also urged the court to reduce his $100 million security to $25 million. He faces 20 years of imprisonment if found convicted.
A federal grand jury had last week formally indicted Mr. Rajaratnam and his colleague Danielle Chiesi of numerous counts of securities fraud and conspiracy.
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During the hearing while the prosecutors pressed for an early date, the lawyers of Mr. Rajaratnam and Ms. Chiesi urged the judge that they need more time to prepare for the trial as they have to listen to the more than 100 hours of tapes which was recorded by the federal investigating agencies.
According to the 17-count indictment filed against them last week, Mr. Rajaratnam, Ms. Chiesi and others repeatedly traded on material, non-public information pertaining to upcoming earnings forecasts, mergers, acquisitions, or other business combinations (inside information).
The inside information was given as tips by insiders and others at hedge funds, public companies, and firms — including Intel, IBM, McKinsey & Company (McKinsey), Akamai Technologies, Inc. (Akamai) and Polycom, Inc. (Polycom).