Insider trader's $65m profit

NEW YORK - Federal prosecutors boosted their insider trading charges case yesterday against the Sri Lanka-born man they say was behind history's largest hedge fund insider trading case.

The rewritten indictment accuses Galleon Group founder Raj Rajaratnam of making up to US$45 million ($65 million) from trades based on secrets. A prosecutor has said in court that his illicit gains may top US$50 million.

The indictment adds two securities fraud charges against Rajaratnam. It also expands the time frame for some of the alleged crimes from months to years.

The fresh indictment resulted from what prosecutors say they learned as a result of some defendants who have pleaded guilty in a case that has resulted in charges against 21 people, many of them formerly high-level executives with major corporations.

Rajaratnam, 52, has denied the charges that were first brought with his October arrest. Once described as one of the wealthiest men in the US, Rajaratnam remains free on US$100 million bail.

The indictment also strengthened allegations against a co-defendant, Danielle Chiesi, who, like Rajaratnam, has pleaded not guilty to charges in the case.

Both Rajaratnam and Chiesi live in Manhattan.

The new charges grew from guilty pleas by Anil Kumar and Rajiv Goel, among others.

Goel, 51, of Los Altos, California, who pleaded guilty this week, was a director of strategic investments at Intel Capital, the investment arm of microprocessor maker Intel Corp, until his October arrest.

Prosecutors say he tipped Rajaratnam in April 2007 about Intel's quarterly earnings before the company's public announcement. Prosecutors say Rajaratnam made at least US$3 million as a result of the information Goel gave him.

- AP