Rajaratnam’s Brother Renga Was Also Investigated For Insider Trading

At the time, nothing came of it, but Raj isn’t the first member of the Rajaratnam family to come under insider trading suspicion.

WSJ: In papers filed Tuesday in a New York federal court, the Galleon Group founder disclosed that he was deposed by federal authorities in 2007 in an insider-trading investigation involving “an unrelated hedge fund.” That fund was run by Rengan Rajaratnam, Raj’s brother, people familiar with the matter said. The investigation of Sedna began as an audit by the SEC and eventually turned into an insider-trading investigation into both Sedna and Galleon, a person close to the situation said.

The disclosure surfaced as Raj Rajaratnam denied civil insider-trading charges filed last month by the Securities and Exchange Commission. In response to the SEC complaint, Raj Rajaratnam’s lawyers argued that the wiretaps used in an insider-trading case filed last month against him violated his constitutional rights. As part of that filing, Mr. Rajaratnam’s lawyers argued the wiretaps were unnecessary because he was already providing information to the government in the 2007 investigation of his brother’s hedge fund. The status of the investigation of the fund run by Rengan Rajaratnam, the brother, isn’t clear. The SEC declined to comment, as did federal prosecutors bringing a separate criminal case against Raj Rajaratnam. A lawyer for Rengan Rajaratnam didn’t return calls for comment. Rengan Rajaratnam hasn’t been charged with any wrongdoing.

Obviously, we’ll assume there’s nothing there. However it would be interesting to know if being pulled in for a deposition on hedge fund insider trading in his brother’s case spooked Raj at all.