Rengan Rajaratnam, the younger brother of convicted Galleon Group founder Raj Rajaratnam, was cleared Tuesday of conspiring to engage in insider trading while at the hedge fund, ending a five-year winning streak by U.S. prosecutors.
After deliberating for less than four hours, a federal jury in New York found Rengan Rajaratnam, a former portfolio manager at Galleon, not guilty of the one conspiracy count he faced following the mid-trial dismissal by a judge of two more serious fraud charges.
Rajaratnam, 43, who was living in Brazil at the time of his indictment, hugged his lawyers after the jurors were dismissed.
“You can go back to Brazil for the finals,” U.S. District Judge Naomi Reice Buchwald said, referring to the World Cup.
“Absolutely,” Rajaratnam said.
The verdict came more than three years after jurors in the same courthouse convicted Raj Rajaratnam, 57, of an insider trading scheme that resulted in $63.8 million in illicit profit, earning him an 11-year prison sentence.
Before Tuesday, a crackdown on insider trading led by Manhattan U.S. Attorney Preet Bharara’s office had resulted in the conviction of 81 individuals, with no acquittals since October 2009.
“While we are disappointed with the verdict on the sole count that the jury was permitted to consider, we respect the jury trial system whatever the outcome,” Bharara said in a statement.
Several jurors said prosecutors failed to show that Rengan Rajaratnam knowingly conspired with his brother.
“We felt like a lot of the trial was about Raj,” said juror Catherine Wolcott, a graphic designer. “We were waiting to hear more about Rengan, who was the actual person on trial. By the end, we were all like, ‘Where’s the evidence?’ ”
The Pentagon said Tuesday that it has completed ground inspections of its fleet of F-35 Lightning II fighters but still has not decided whether the warplanes are ready for their much-anticipated international debut at two British air shows.
The Marine Corps’s version of the fighter jet had been scheduled to fly before prospective international buyers at the Royal International Air Tattoo, which kicks off Friday, and the week-long Farnborough Air Show, which starts Monday. But last week, the military grounded its full F-35 fleet after an engine caught fire in one of the Air Force versions of the plane, launching a safety investigation and casting the fighter jets’ big debut into doubt.
“I think certainly we’d be disappointed if we weren’t able to take [the F-35] to Farnborough,” Pentagon spokesman Rear Adm. John Kirby said at a news conference Tuesday. “That said, safety has got to be priority number one, and it is, and nobody wants to rush these aircraft back into the air before we know exactly what happened.”
Kirby said a decision about the Farnborough show would be made soon but declined to give a time frame. A Defense Department official said a decision about the Royal International Air Tattoo would probably be made at the same time and that the military does not have a “no-go” date for the shows.
The military is now analyzing the data collected during the ground inspections, said the official, who spoke anonymously, citing departmental policy.
● The car service Uber has agreed to limit prices during emergencies, natural disasters or other unusual market disruptions consistent with New York’s law against price gouging, the company and state attorney general said. Under the agreement, Uber will set a cap during “abnormal disruptions of the market,” limited to the range of prices charged in the preceding 60 days and excluding the three highest prices. Attorney General Eric T. Schneiderman said the agreement between his office and Uber Technologies and Uber NYC will apply to UberX, Uber Black and Uber SUV statewide.
● Alcoa reported a second-quarter profit of $138 million, reversing a year-ago loss, and the results beat analysts’ expectations. The company reported strong results in its engineered-products business, which makes parts for industrial customers, while looking to cut costs in its aluminum-smelting segment. Alcoa said net income was 12 cents per share. In the year-ago quarter it lost $119 million, or 11 cents per share. Alcoa reported revenue of $5.84 billion compared with $5.85 billion in the same quarter a year ago.
● The Senate Intelligence Committee approved a bill that would give Bank of America, Visa and other companies operating critical U.S. computer systems legal protections for sharing hacking threats with each other and the government. Backed by industry groups including the American Bankers Association and the Financial Services Roundtable, the bill is designed to address concerns that disclosing hacking vulnerabilities could expose companies to lawsuits or that communications with competitors could invite antitrust actions.
● Consumer borrowing in the United States surged again in May as Americans took out more loans to purchase cars. The $19.6 billion increase in credit followed a revised $26.1 billion gain in April, Federal Reserve figures showed. Non-revolving lending, which includes auto and school loans, advanced by the most in a year.
● One of the nation’s leading gun manufacturers has reached a settlement in a nationwide lawsuit claiming that a popular hunting rifle has a defective trigger mechanism that can cause injury and death. Gun owner Ian Pollard sued Remington Arms in 2013, claiming problems with its Model 700 bolt-action hunting rifle. An agreement in the class-action case was reached last week, although terms are still being worked out. A federal judge in Kansas City, Mo., gave both sides until Oct. 30 to secure a formal agreement.
— From news services
● 2 p.m.: Federal Reserve releases minutes from its June policy-setting meeting.