The SEC reports that former hedge fund portfolio manager Rajarengan “Rengan” Rajaratnam has agreed to pay more than $840,000 and accept securities industry bars in order to settle the agency’s insider-trading case brought against him for “his role in the widespread insider-trading scheme conducted by his brother Raj Rajaratnam and hedge fund advisory firm Galleon Management.”
Rajaratnam “neither admitted nor denied the SEC’s allegations in agreeing to the settlement that is subject to court approval,” the commission notes.
“The proposed final judgment would permanently enjoin Rengan Rajaratnam from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and require him to pay $372,264.42 in disgorgement, $96,714.27 in prejudgment interest, and a $372,264.42 penalty,” say SEC officials.
Moreover, Rajaratnam, who became a portfolio manager at Galleon after co-founding Sedna Capital Management, a hedge-fund advisory, “would 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.”
The alleged insider trading involved “more than 15 companies for illicit gains totaling nearly $100 million,” according to the SEC’s statement regarding the proposed settlement notes. “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,” officials add.
“The settlement ensures he’s out of the industry and paying a serious price for breaking the law,” Andrew J. Ceresney, director of the SEC’s division of enforcement, says in a prepared statement.
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