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Brother of hedge fund founder indicted in NYC

NEW YORK — The brother of a jailed onetime billionaire hedge fund boss has been charged with conspiring with his brother to cheat on Wall Street, earning nearly $1.2 million illegally, federal authorities said Thursday.

Rengan Rajaratnam, 42, of Manhattan, was charged in an indictment returned Wednesday and unsealed a day later with conspiracy to commit securities fraud and six counts of securities fraud. He was not immediately arrested.

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His brother, Raj Rajaratnam, is serving an 11-year prison sentence. He was convicted in 2011 of earning up to $75 million by swapping secrets about public companies with other hedge fund managers and friends at public companies.

‘‘As alleged, Rengan Rajaratnam and his brother shared more than DNA; they also shared a penchant for insider trading,’’ US Attorney Preet Bharara said. ‘‘Along with his brother Raj, Rengan Rajaratnam was allegedly at the heart of an insider trading scheme that swept up an unprecedented number of people in its web of corruption, and with his indictment, we are one step closer to closing that chapter.’’

George Venizelos, head of the New York FBI office, said Rengan Rajaratnam’s career arc paralleled his brother’s.

‘‘He followed in Raj’s footsteps by obtaining an MBA from a top-flight business school. He went to work for Raj at Galleon. As alleged in the indictment, Rengan also engaged in the same illegal conduct as Raj. He reaped the benefit of insider information obtained by Raj, and he planned to reciprocate by cultivating his own source of inside information. Now Rengan’s career arc has descended to the same place his brother’s did: . . . defendant.’’

In a separate action, civil charges were brought against Rengan Rajaratnam by the ­Securities and Exchange Commission.

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