[JURIST] Galleon Group [partnership website] hedge fund founder Raj Rajaratnam [Financial Times profile] and former hedge fund consultant Danielle Chiesi pleaded not guilty Monday to insider trading charges. The pair were indicted [text, PDF; JURIST report] last week by a federal grand jury in Manhattan on charges of conspiracy and securities fraud for their alleged role in the largest hedge fund insider trading case in US history. Prosecutors asked the judge to schedule the trial for June or July [Bloomberg report], but Rajaratnam and Chiesi asked for more time to prepare a defense. No trial date has been set. If convicted, Chiesi, former hedge fund consultant to New Castle Partners LLC, could face up to 155 in prison. Rajaratnam faces a sentence of up to 145 years. The indictment also seeks $20.8 million in forfeiture.

Rajaratnam and Chiesi were arrested in October and charged [complaint, PDF; press release] along with four other individuals and two business entities with insider trading. The complaint alleged that the individuals, including a managing director at Intel Corp., a director at McKinsey & Co., and a senior executive at IBM [corporate websites], provided Galleon Group and another hedge fund with material nonpublic information about several corporations upon which the funds traded, generating $25 million in illicit gain. The government of Sri Lanka has accused Rajaratnam of helping fund [Financial Times report] the Tigers of Tamil Eelam (LTTE) [JURIST news archive], a group designated as a terrorist organizations by several countries including the US. Although records show that Rajaratnam contributed money to the Tamil Rehabilitation Organization, a charity that the US claimed was a front for the LTTE, Rajaratnam denies funding the LTTE and has not been charged with funding the LTTE.