Linked with Ravi Karunanayake’s US$ 3m deal:

Top LTTE financier arrested for fraud

by Walter JAYAWARDHANA

The founder of Galleon Group Hedge Fund, Sri Lanka-born Raj Rajaratnam was arrested and charged with criminal offences of insider trading securities frauds. Galleon is a major hedge fund player known for its investments in technology stocks.

Rajaratnam was also linked to the controversial US$ three million channelled to UNP Parliamentarian Ravi Karunanayake. At the local hearing, Karunanayake had admitted that it was Rajaratnam who credited US$ three million to the MP’s nominee’s account. The case is due to be taken at the Colombo High Courts later this month.

According to records obtained by ABCNews.com, Rajaratnam was a major contributor to Hillary Clinton’s campaign and also the single largest known US contributor to a charity linked to a LTTE front organisation.

Rajaratnam has given more than US$3.5 million to the LTTE front organisation - Tamil Rehabilitation Organization (TRO) whose assets were frozen by the US Treasury Department in Nov. 2007 because of its alleged ties to the Tiger terrorists.

ABCnews.com reported that Rajaratnam and his wife were also major contributors to a number of Democratic campaigns, giving a total of US$ 118,000 to, among others, the Senate campaigns of Hillary Clinton and Chuck Schumer and the presidential campaigns of Mrs. Clinton and Barack Obama.

The FBI said Rajaratnam was charged with four counts of conspiracy and eight counts of securities fraud. He was arrested at his apartment on the night of October 15. The Galleon group has nearly three billion dollars under its management.

Rajaratnam, who Forbes ranked as No. 559 on its 2009 list of

the world’s billionaires, was snared in a $20 million insider-trading case touted by the authorities for its first-ever use of court-authorized wiretaps against Wall Street’s big wheels.

“They may have been privy to a lot of inside information, but there was one secret they did not know - and that was that we were listening,” Bharara said. The six suspects arrested are accused of having enriched themselves by using non-public information about companies that included Google, Hilton Hotels and Sun Micro Systems. Some of their conversations intercepted by investigators via wiretap are detailed in the federal criminal complaint.

Rajaratnam, whose fortune was pegged by Forbes as $1.3 billion, is accused of being at the heart of several insider trades by leading Galleon Technology Funds to make dirty deals off privileged information. Authorities said the Sri Lankan hedge fund guru used his high-level contacts at other Wall Street firms to engage others in the scheme.