Military History | How To Make War | Wars Around the World Rules of Use How to Behave on an Internet Forum
Sri Lanka Discussion Board
   Return to Topic Page
Subject: Sri Lankan Hedge fund manager arrested alleged probable Tiger donor
Le Zookeeper    10/23/2009 9:14:53 PM
For years, whenever anyone asked Raj Rajaratnam about the success of his hedge fund, the Galleon Group, he chalked it up to the determination and intelligence of his staff. "It is pride, and I want to win," Rajaratnam said in "The New Investment Superstars," a book by Lois Peltz published in 2001. "After a while, money is not the motivation. I want to win every time. Taking calculated risks gets my adrenaline pumping." Now prosecutors are claiming that Rajaratnam, 52, crossed the line into criminal activity. At dawn on Friday, Rajaratnam was arrested at his Manhattan home, charged with running the biggest insider trading scheme involving a hedge fund. He and five others are accused by the Justice Department and the Securities and Exchange Commission of relying on a vast network of company insiders and consultants to make more than $20 million in profit from 2006 to 2009. Rajaratnam's lawyer has said his client is innocent. He is free on $100 million bail and is expected to be in the office Monday to address Galleon employees. In 2007, Rajaratnam's name arose in connection with an inquiry into fundraising for the Tamil Tigers, the Sri Lankan rebel group that was defeated in May after a quarter-century of violence. News of Rajaratnam's arrest has shaken the secretive hedge fund world, in which intelligence on companies is often shared among Wall Street analysts, traders and other investors. To gain an edge, hedge funds employ lobbyists, private investigators and other connected people to dig for information about a company or industry. While most of the information is obtained legally, the government's use of wiretapping and confidential witnesses in the Galleon case raises questions about when investors can act on information that is not public. The case also signals a new zeal by regulators and law enforcement officials to clamp down on Wall Street crime after failing to detect the $68 billion Ponzi scheme run by Bernard L Madoff. At the centre of this purported insider trading ring is Rajaratnam, who rose from a technology analyst to become a hedge fund billionaire. Rajaratnam always remained close to his homeland, Sri Lanka, which was riven by fighting between its government and the Tamil Tigers, formally known as the Liberation Tigers of Tamil Eelam, or LTTE. The hedge fund manager rarely hesitated to reach into his wallet for causes related to the country. When the island was struck by a disastrous tsunami in 2004 - he had been there at the time, but was inland - he quickly organized a charity to raise money to rebuild homes. In 2004, he also helped raise $120,000 to buy dogs to detect land mines littered throughout Sri Lanka. Yet his giving was not without controversy. In 2005 and 2006, the charity he created, Tsunami Relief, gave $1.5 million to the Tamil Rehabilitation Organization, a group officially dedicated to helping victims of the fighting. But prosecutors have since charged the Tamil charity with aiding the rebel group, and its non-profit status has been suspended. A criminal complaint filed in Brooklyn federal court in 2007 described a wealthy supporter, identified only as "Individual B," who donated more than $2 million to the terrorist group in 2000 and 2004. People briefed on the matter confirmed a report by The Wall Street Journal that Individual B was Rajaratnam, who was never charged or publicly identified in that case. Several defendants in that case have pleaded guilty to raising money for the LTTE. A lawyer for Rajaratnam, James Walden of Gibson, Dunn & Crutcher, said in a statement that his client was not a Tiger supporter and that the money was spent on "rebuilding thousands of homes for Tamils, Sinhalese and Muslims without discrimination."
Quote    Reply

Show Only Poster Name and Title     Newest to Oldest