The younger brother of convicted hedge fund honcho Raj Rajaratnam flew to New York from Brazil last weekend to tell a Manhattan federal judge that insider trading doesn’t run in the family — despite what prosecutors have alleged.
“Not guilty, your honor,” Rengan Rajaratnam, 42, told Judge Naomi Buchwald yesterday afternoon, after spending nearly two days in jail and several hours on a red-eye flight back to the states.
Rengan was escorted from Brazil by FBI agents — who promptly arrested him as they arrived at JFK.
Rengan, who stands accused of earning $1.2 million on illegal tips, was working in Brazil when an indictment was handed up last week.
His lawyer, Vinoo Varghese, said Rajaratnam dropped everything when he heard the news and sought to return to the US.
When he missed his Friday-night flight, federal agents insisted that Rajaratnam take the next flight out.
Buchwald released Rajaratnam on $1 million bail and ordered him to live at his SoHo apartment until his trial — and to surrender his passport.
Rajaratnam received illegal insider tips from his brother’s pal while working at the Galleon and Sedna hedge funds, according to the seven-count indictment unsealed by US Attorney Preet Bharara.
The feds said he pocketed the seven-figure payday by illegally trading semiconductor maker Advanced Micro Devices and broadband services company Clearwire Corp.
Rengan faces at least 20 years in prison if convicted of the securities-fraud counts.
He was a key figure in his brother’s 2011 trial as he was caught on wiretapped conversations with the elder Rajaratnam, who is serving an 11-year prison sentence.