* Galleon hedge fund founder to go on trial Feb. 28
* Former trader Chiesi's trial begins April 25
* Case is part of widening insider trading probe at funds
NEW YORK, Dec 10 (Reuters) - Galleon hedge fund founder Raj Rajaratnam and his principal co-defendant in a broad probe of insider trading at hedge funds will have separate trials on securities fraud and conspiracy charges, a U.S. judge ordered on Friday.
Both Rajaratnam and Danielle Chiesi, a former trader at New Castle Funds LLC in New York, had been scheduled to go on trial together on Jan. 17 in what U.S. prosecutors have described as the biggest probe of hedge funds in the United States.
Rajaratnam's trial would begin on Feb. 28 and Chiesi's trial on April 25, U.S. District Judge Richard Holwell said in a written order.
Rajaratnam and Chiesi both pleaded not guilty to the charges following their arrest on Oct. 16, 2009. The Sri Lankan-born Rajaratnam, once considered a billionaire, had since his arrest been the central figure in an investigation of hedge funds that has since widened.
Prosecutors initially focused on two overlapping networks of people allegedly trading on confidential tips about mostly tech stocks.
On Nov. 24, Rajaratnam and Chiesi lost their bid to suppress as evidence at trial the FBI's secretly-recorded conversations of them in the investigation. [ID:nN24231045]
Rajaratnam and Chiesi face up to 20 years in prison if convicted. Both are free on bail pending the trials. Rajaratnam and Chiesi made about $53 million combined in profits from illegal trades, prosecutors have said.
At least two dozen former hedge fund managers, lawyers, traders and others have faced criminal or civil charges in the case. Fourteen have pleaded guilty to criminal charges, and 11 of them agreed to cooperate with prosecutors. One is at large.
The case is USA v Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 10-01184. (Reporting by Grant McCool; Editing by Tim Dobbyn)