U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23128 / November 5, 2014
Securities and Exchange Commission v. Rajarengan (a/k/a Rengan) Rajaratnam, Civil Action No. 13-CV-1894 (SDNY) (JGK)
The Securities and Exchange Commission today announced that on October 28, 2014, the Honorable John G. Koeltl of the United Stated District Court for the Southern District of New York entered a final judgment by consent against former hedge fund manager Rajarengan "Rengan" Rajaratnam. The judgment orders Rengan Rajaratnam to pay more than $840,000 and enjoins him from future violations of the federal securities laws.
The SEC filed civil charges in March 2013 against Rengan Rajaratnam for his role in the widespread insider trading scheme conducted by his brother Raj Rajaratnam and hedge fund advisory firm Galleon Management. The insider trading occurred in securities of more than 15 companies for illicit gains totaling nearly $100 million. The SEC has now obtained court judgments or settlements in Galleon-related enforcement actions against 35 defendants, resulting in approximately $165 million in monetary sanctions.
Rengan Rajaratnam, who became a portfolio manager at Galleon after co-founding hedge fund advisory firm Sedna Capital Management, neither admitted nor denied the SEC's allegations in agreeing to the settlement. The final judgment permanently enjoins Rengan Rajaratnam from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and requires him to pay $372,264.42 in disgorgement, $96,714.27 in prejudgment interest, and a $372,264.42 penalty. Separately, Rengan Rajaratnam also agreed to be barred from association with any investment adviser, broker, dealer, municipal securities dealer, or transfer agent with the right to apply for reentry after five years.