The founder of Galleon hedge fund, Raj Rajaratnam, 52, and co-defendant Danielle Chiesi, 44, pleaded “not guilty” on Monday to charges of securities fraud at a hearing before Judge Richard Holwell at U.S. District Court in Manhattan.
Rajaratnam, who is free on 100 million dollars bail and faces a total of 145 years in prison if found guilty on all charges, says he is innocent. Chiesi, a former hedge-fund consultant to New Castle Partners LLC, faces a sentence of up to 155 years. The indictment is seeking $20.8 million in forfeiture.
Today’s formal plea clears the way for a trial.
Sri Lankan-born Rajaratnam and Chiesi are the only defendants to be formally indicted so far in what U.S. prosecutors describe as the biggest hedge fund insider trading case ever.
Billionaire Rajaratnam and co-defendant Danielle Chiesi are the most prominent defendants among 21 people charged with using insider information from company executives involving some of America’s best-known firms, including IBM Corp (IBM), McKinsey & Co and Intel Capital, an arm of Intel Corp. (INTC) to earn about 20 million dollars in illegal profits.
Prosecutors, who say they have identified about $40 million in alleged illicit gain, will turn over 100 hours of intercepted phone calls to attorneys for the defendants this week.