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10 Feb 2010

Rajaratnam & Chiesi Charged With a Superseding Indictment

HedgeCo News - Raj Rajaratnam and Danielle Chiesi Federal have been accused with a 19-count superseding indictment by Federal prosecutors yesterday, Courthouse News Service reported.

A superseding indictment is an indictment that is filed subsequent to an original indictment. It is usually based upon supervening events that logically change the nature of the original indictment.

The superseding indictment is based on guilty pleas from Anil Kumar and Mark Kurland, the Courthouse reported.

The government is claiming Rajaratnam and Chiesi made millions of dollars for themselves and their hedge funds by trading on inside information about Intel, IBM, Akamai Technologies, Polycom, Hilton Hotels Google, Sun Microsystems, Clearwire Corp., Advanced Micro Devices, ATI Technologies, eBay, and PeopleSupport.

The investigation started with suspicions in the 1990s when chip maker Intel Corp alleged that Rajaratnam was receiving tips from an Intel insider. The investigation was based on a witness who had first entered into a plea agreement with the United States before she began to cooperate in an investigation into Rajaratnam’s practices.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in the USA’s largest hedge fund insider-trading scheme. His bail was set at $100 million.