Rajaratnam's brother pleads not guilty to charges in US

SEC alleged that Rengan repeatedly received inside information from his brother and reaped more than $3 million in illicit gains

Jailed hedgefund manager Raj Rajaratnam's younger brother has pleaded not guilty at a US court to charges of conspiring in an insider trading scheme to illegally earn nearly $1.2 million.

Rengan Rajaratnam, 42, "pleaded not guilty" before a New York court, where he was produced yesterday, a day after his arrest at the John F Kennedy Airport here on arrival from Brazil.

The younger Rajaratnam, who hails from Sri Lanka, was indicted last week by the FBI and US Securities and Exchange Commission (SEC) on charges of insider trading.

A former portfolio manager at the hedge fund management firm Galleon Group, Rengan is the younger brother of Raj Rajaratnam who in October 2011 was sentenced to 11 years in prison and fined a total criminal and civil penalty of over $150 million after being convicted in a massive insider trading case, the largest in the US history.

In a statement, his lawyer said that Rengan voluntarily surrendered after returning from Brazil on Sunday morning to clear his name.

"After reading about his indictment, Rajaratnam immediately volunteered to return from Brazil, where he had been living and working for the past year, in order to defend himself," the attorneys, David Tobin and Vinoo Varghese, said in the joint statement.

The indictments alleged that Rajaratnam conspired with his brother, Galleon founder Raj Rajaratnam, to trade on the basis of material, non-public information concerning Clearwire Corp and Advanced Micro Devices Inc (AMD) in 2008, earning nearly $1.2 million in profits in the aggregate.

In a separate complaint, SEC alleged that from 2006 to 2008, Rengan repeatedly received inside information from his brother and reaped more than $3 million in illicit gains for himself and hedge funds that he managed at Galleon and Sedna Capital Management, a hedge fund advisory firm that he co-founded.

Last year, former Goldman Director Rajat Gupta, the poster boy of Indians at the Wall Street, was also found guilty of illegally tipping off his friend Raj Rajaratnam of confidential market information.