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From Securities Regulation Daily, July 8, 2014

Rengan Rajaratnam acquitted of conspiracy charge in insider trading action

By Jim Hamilton, J.D., LL.M.

A federal jury in the United States District Court for the Southern District of New York acquitted former hedge fund manager Rajarengan “Rengan” Rajaratnam of conspiracy to commit securities fraud in an insider trading case (U.S. v. Rajaratnam, July 8, 2014).

Allegations. The government had alleged that the defendant participated in a scheme to defraud by obtaining, sharing and disclosing material inside information belonging to public companies and executing securities transactions on the basis of inside information. Manhattan U.S. Attorney Preet Bharara said that, while disappointed with the verdict on the sole count that the jury was permitted to consider, he respects the jury trial system whatever the outcome. In a statement, he added that his Office maintains its faith in the criminal justice system, a system that has resulted in the convictions by trial or guilty plea of 85 other defendants on insider trading charges and pledged to continue to seek justice in the investigation and prosecution of those who violate the securities laws.

Verdict. The verdict sends a powerful message that juries are willing and able to reach a not-guilty verdict if they don't believe the government has presented enough evidence to convict, said White & Case partner and former SEC Trial Attorney Greg Little. ``Fighting back against the government is not easy, but it is also not impossible. Those who are facing charges by the government should not assume a jury will agree with everything the government alleges, and a strong, well presented defense may result in a favorable ruling for the defendant,” emphasized Mr. Little, who added that the verdict may also have a chilling effect on the US Attorney's office and encourage them to bring only those cases where there is truly no doubt about the bad conduct being alleged.

The case is No. 13-cr-00211.

MainStory: TopStory FraudManipulation NewYorkNews

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