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Rajaratnam in talks with U.S. for at least 30 days

[Reuters, Tuesday, 17 November 2009 08:47 No Comment]

Galleon Group founder Raj Rajaratnam and five others charged a month ago in the biggest U.S. hedge fund insider trading case will be in talks with prosecutors for at least another month over the allegations against them, court documents said on Monday.

Prosecutors and lawyers for the six accused "have been engaged in, and are continuing, discussions concerning a possible disposition of these cases," according to documents filed in Manhattan federal court.

Rajaratnam, a Sri Lankan-born billionaire, and the other five were arrested, charged and released on bail on Oct. 16. They could be indicted, plead guilty or go to trial.

"The government has requested continuance of 30 days to engage in further discussions with counsel about disposition of these cases," the documents filed by the office of the U.S. Attorney for Manhattan said.

Each defendant had waived the right to be charged in an indictment or an alternative charging document known as an "information" for the next 30 days only, the documents said.

A spokesman for Rajaratnam’s lawyer declined to comment on Monday, but in court papers, the lawyer, John Dowd, has indicated he wants the case to go to trial.

In all, 20 people face criminal charges, civil charges or both in the investigation that drew in employees of major U.S. corporations such as International Business Machines Corp (IBM.N), the venture capital arm of Intel Corp (INTC.O) and management consultants McKinsey & Co.

Prosecutors have alleged $40 million of illegal profits while the U.S. Securities and Exchange Commission has specified $53 million in its civil investigation.

At least five people have pleaded guilty to charges, hoping to receive a reduced sentenced for their cooperation with the government’s investigation.

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