Galleon hedge fund founder Raj Rajaratnam and co-defendant Danielle Chiesi asserted their innocence on Monday to charges of securities fraud, in what U.S. prosecutors describe as the biggest hedge fund insider trading case ever.

Wearing a crisp black suit and blue tie, Rajaratnam, 52, betrayed no emotion as he entered a plea of not guilty before Judge Richard Holwell at U.S. District Court in Manhattan. Chiesi, 44, who also entered a not guilty plea, smiled and embraced her mother following the proceeding.

Her mother, Gloria Chiesi, afterward told reporters: My daughter is innocent and that's what you will be printing. She's my angel. God borrowed my body and gave me this girl.

Lawyers for both defendants declined to comment after the hearing.

Assistant U.S. Attorney Joshua Klein said he expects the trial to last one month and recommended that it be scheduled to begin in June or July, since the corresponding U.S. Securities and Exchange Commission case is scheduled for August.

The judge said he was not prepared to set a firm trial date.

That might wind up to be the schedule, he said.

Prosecutors said investigators would turn over some 100 hours of wiretapped conversations to the defense.

Sri-Lankan born Rajaratnam and Chiesi, a former employee of New Castle Funds LLC, are the only defendants to be formally indicted so far. Both have been out on bail since their October 16 arrest. A bail hearing for Rajaratnam is scheduled for January 8.

Twenty-one people have been criminally or civilly charged in the insider trading case involving employees of companies including International Business Machines Corp , McKinsey & Co and Intel Capital, an arm of Intel Corp .

Most of the accused had expertise in technology stocks. The allegations included passing inside information on earnings announcements, takeovers and contracts on 10 companies, generating more than $30 million in illegal profits, according to prosecutors.

They alleged Rajaratnam and Chiesi made $20.8 million in illegal profits.

Four others who were arrested and charged on the same day have not been indicted, but their lawyers are in talks with prosecutors on disposition of their cases.

They are Rajiv Goel, a former director at Intel Capital; Anil Kumar, former director of McKinsey, a global management consulting firm; Mark Kurland, former executive at New Castle hedge fund; and Robert Moffat, formerly senior vice president and an executive in IBM's systems and technology group.

Six traders or lawyers have pleaded guilty to criminal charges in the sprawling investigation.

In the overall case, inside trading allegedly took place in the shares of Google Inc , Sun Microsystems Inc , Advanced Micro Devices Inc , Polycom Inc

, Hilton Hotels Corp , Intel, Clearwire Corp , Akamai Technologies Inc , Atheros Communications Inc and IBM, among others.

The cases are USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-mj-2306 and USA v Danielle Chiesi et al No. 09-mj-2307.

(Reporting by Edith Honan; editing by Andre Grenon)

Raj Rajaratnam Investment Insider trading Intel