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Raj Rajaratnam is the founder of Galleon Group, a New York based hedge fund management firm.He is the richest Sri Lankan born person in the world. He has contributed generously to charitable organizations and political action groups. Some of his contributions have been controversial. On October 16, 2009 he was arrested by the FBI on allegation of insider trading. Due to his arrest and subsequent release on bail, he has indicated that he will wind down his holdings in the Galleon fund by January 2010. His attorney indicated that Mr. Rajaratnam will fight the charges of insider trading in court.

Background and Career

He was born in Sri Lanka, and according to widely read newspaper, the Island attended St Thomas' College, Mt. Lavinia, there are other websities that say he attended S. Thomas' Preparatory School, Kollupitiya,. He then moved to England to complete his schooling, and studied engineering at the University of Sussex in England. Rajaratnam earned an M.B.A. from Wharton School of the University of Pennsylvania in 1983. He is married with three children. Rajaratnam, a Tamil self-made billionaire hedge fund manager, is the 236th richest American according to Forbes magazine (2009). with an estimated net worth of $1.8 billion. He was ranked 262nd richest American in 2008 and as of early 2009, is the richest Sri lankan born person in the world. As of 2009, his $1.2 billion Diversified Fund has returned 22.3% according to an investor letter.

Rajaratnam started his career as a lending officer at the Chase Manhattan Bank where he made loans to high-tech companies. He joined the investment banking boutique Needham & Co. as an analyst in 1985, where his focus was on the electronics industry. He became the head of research in 1987 and the president in 1991, at the age of 34. At the company’s behest, he started a hedge fund, Needham Emerging Growth Partnership in March 1992, which he later bought and renamed ‘Galleon’.

Rajaratnam has been featured among the elite US money managers in a book called The New Investment Superstars: 13 Great Investors and their Strategies for Superior Returns by Lois Peltz. Initially invested in technology stocks and healthcare companies, he says his best ideas come from frequent visits with companies and conversations with executives who invest in his fund. His hedge fund is currently valued at $3.7 billion, down from its peak of $7 billion in 2008. After his arrest, Galleon has received requests from investors for withdrawal of $1.3 billion. Mr. Rajaratnam informed his employees and investors in a letter on October 21, 2009 that he intends to wind down all the hedge funds of the Galleon Group. Investors are expected to receive their money back in January 2010, barring government intervention.

Contributions to Charitable and Political Organizations

Rajaratnam has made more than $20 million in charitable donations in the last five years. In September 2009, Rajaratnam pledged to donate a million US dollars to help with the rehabilitation of LTTE combatants. He has donated generously to clear land mines in the war-affected areas in Sri Lanka. He recalled his visits to the mine-impacted areas of Sri Lanka and underscored the humanitarian toll that mines have taken. Recalling his encounter with a young child in Kilinochchi who had lost both legs to a landmine, Rajaratnam stated that this particular image that is etched in his memory “made it an easy decision to write the check.” He helped Sri Lankans recover after the 2004 Tsunami. Mr. Rajaratnam was also a contributor to various causes that promoted development in the Indian subcontinent and programs that benefited lower income South Asian youth in the New York area.

According to the Federal Election Commission, Rajaratnam has made over $114,000 in political contributions in the past five years including 87,000$ to the Barack Obama for president campaign. He has also contributed to the Democratic National Committee, and various campaigns on behalf of Hillary Rodham Clinton, Charles Schumer, and Robert Menendez.

Controversy

He has also contributed $3.5 million to the Tamils Rehabilitation Organisation (TRO) whose assets were frozen by the USA due to its alleged close connections to the LTTE . TRO's offices were raided by the FBI in 2006. TRO's offices were raided by the FBI in 2006 but the organization was never charged with any wrongdoing.

The Sri Lankan government has stated that Mr Rajaratnam had contributed for several years of the Sri Lankan Civil War to the LTTE with millions of US dollars and that he was under investigation in Sri Lanka. However, the senior Military official could not give specific details about the alleged contributions to the LTTE. The Sri Lankan government has had a cordial relationship with Mr Rajaratnam and recently accepted a million dollar pledge by him to rehabilitate former LTTE combatants.

In a federal lawsuit filed in Newark, N.J he is been sued by alleged victims of violence in Sri Lanka who say he helped finance the LTTE..Mr. Walden his lawyer denied any involvement with the LTTE.

Arrest for Insider Trading

On Friday October 16, 2009, Raj Rajaratnam was arrested by the FBI and accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc..Cite error: The <ref> tag has too many names (see the help page).

Rajaratnam allegedly profited from information they got from Robert Moffat, an IBM senior vice president who allegedly provided data about a possible IBM merger with Sun Microsystems that led to a $1 million windfall for Rajaratnam's New Castle funds. Rajaratnam has also been accused of conspiring with Intel Capital treasury department managing director Rajiv Goel, and Anil Kumar, a director of McKinsey & Co. The alleged offenses took place over three years starting in January 2006. It was reported that Rajaratnam, Goel and Kumar were all of class of 1983 from Wharton business school.

The Sri Lankan stock market has fallen sharply after his arrest on insider trading charges. The Colombo Stock Exchange fell 3.9% before recovering to close down 1.6% on Monday, the biggest fall since June 4.

Sri Lanka's Securities and Exchange Commission is reviewing the active stock trading of Raj Rajaratnam with a view of identifying any insider trading.

US prosecutors claim that Mr Rajaratnam and five other investors secured inside information regarding firms including Google, AMD, and Hilton Hotels. The others charged in the case include Rajiv Goel, a director of strategic investments at Intel Capital; and Robert Moffat, senior vice president in the systems and technology division of computer group IBM. Jim Walden, an attorney for Mr. Rajaratnam, said his client is innocent and will fight the insider-trading charges.

See also

• List of Tamils of Sri Lanka
• List of St. Thomas' College alumni
• List of Americans by net worth (204-400) (# 274)

References

1. "For Galleon Executive, Swagger in the Spotlight". New York Times. Retrieved 2009-11-02.
2. "#236 Raj Rajaratnam". Forbes. Retrieved 2009-02-19.
3. Michael J. De La Merced; Zachery Kouwe (October 18, 2009). . Retrieved October 19, 2009. {{cite news}}: Check |url= value (help)
4. "Raj Rajaratnam's million dollars – A fine starting point".
5. "First Guardian Equities - Raj Rajaratnam Shareholder profile".
6. "Bloomberg - Raj Rajaratnam profile".
7. "#236 Raj Rajaratnam - The Forbes 400 Richest Americans 2009". Forbes. Retrieved 2009-02-19.
8. "#262 Raj Rajaratnam". Forbes. Retrieved 2009-02-19.
9. ^ Burton, Katherine (2009-10-19). "Raj Rajaratnam Became Billionaire Demanding Edge". Bloomberg.com. Retrieved 2009-10-19. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
10. Amazon.com, http://www.amazon.com/dp/047140313X ISBN 047140313X. Published in 2001.
11. Pulliam, Susan (October 20, 2009). "Galleon Clients Abandon Ship". The Wall Street Journal. Retrieved 2009-10-20. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
12. Checkler, Joseph (October 21, 2009). "Galleon to Wind Down Hedge Funds". The Wall Street Journal. Retrieved 2009-10-21. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
13. "Raj Rajaratnam's million dollars – A fine starting point".
14. "U.S. CORPORATE AND PRIVATE DONORS CONTRIBUTE $120,000 FUNDING SIX MINE DETECTION DOGS FOR HUMANITARIAN DEMINING IN SRI LANKA". {{cite news}}: line feed character in |title= at position 103 (help)
15. "Helping Out the Homeland".
16. Financial Times.com 'Sri Lanka claims Rajaratnam gave Tamil Tigers ‘millions’' by James Fontanella-Khan. Published on October 18 2009.
17. "Raj Rajaratnam's million dollars – A fine starting point".
18. The Wall Street Journal.com, 'Officials Say Investor's Donations Wound Up With Sri Lanka Rebels' by Evan Perez and Eric Bellman. Published on October 19, 2009.
19. O'Connor, Sarah (2009-10-20). "Class of '83 author recalls 'likeable'guy". Financial Times. Retrieved 2009-10-21.
20. "Sri Lanka Stocks Fall on Rajaratnam's Fund Redemption Concerns".

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