Raj Rajaratnam's brother indicted on insider trading charges

Rengan Rajaratnam, the brother of the convicted Galleon Group founder Sri Lankan born Raj Rajaratnam was indicted Thursday on insider trading charges by a federal grand jury in New York.

Sri Lankan fund manager financed LTTE terrorists - Vanity Fair exclusive

Sri Lankan-born Galleon hedge fund founder Raj Rajaratnam, who was found guilty on all counts in the high-profile insider trading trial and awaiting sentencing in the United states, also financed Sri Lanka's decades-long terrorist war, Vanity Fair magazine reported Friday in an exclusive article titled "Crouching Tiger, Hidden Raj".

Jury selection begins today for Sri Lankan-born fund manager's trial

The 12-member jury selection for the criminal trial of Galleon hedge fund founder Raj Rajaratnam begins today at a federal court in Manhattan New York.

US judge separates Rajaratnam and Chiesi trials

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 US judge ordered on Friday.

Billionaire Rajaratnam faces new charges in insider trading scam

NEW YORK: Galleon Group founder and billionaire Raj Rajaratnam, accused of masterminding the largest insider-trading scam in US history, faces

an additional 40 years in prison under a new indictment.

Federal prosecutors added two new securities fraud charges against the Tamil Sri Lankan billionaire in an indictment filed in a Manhattan federal court Wednesday.

The superseding indictment also strengthens several of the other 17 charges against the former hedge fund chief, increases the amount of ill-gotten gains he allegedly netted and lengthens the time frame of the scheme.

If convicted of all of the charges, Rajaratnam, who has pleaded not guilty, could face as much as 185 years in prison.

Prosecutors are also demanding a total of $49 million in forfeitures from both Rajaratnam and his co-defendant, former New Castle Partners portfolio manager Danielle Chiesi. In the earlier indictment, prosecutors were seeking just $20.8 million.

Chiesi does not face any new counts in the indictment, but several of the 17 already levelled against her were amended with new allegations.

The new counts and allegations stem from two of the nine guilty pleas won by prosecutors in a case that has netted 21 people.

Two Indian-American executives, Anil Kumar, formerly of McKinsey & Co, and Rajiv Goel, formerly of Intel, both admitted to passing confidential information to Rajaratnam. Kumar alleges that Rajaratnam paid him as much as $2 million for the tips.

Raj Rajaratnam Indicted for Insider Trading

A federal grand jury has returned an indictment against New York hedge-fund billionaire Raj Rajaratnam, the principal in the $21 million Galleon Group hedge-fund insider trading case -- the biggest such case ever brought, and the first to use court-authorized wire taps. As ABC News reported exclusively, Rajaratnam has also provided extensive financial support to a charity linked to the Tamil Tigers terror groupThe 36-page, 17-count indictment closely tracks the criminal complaint on which Rajaratnam was arrested in October. Rajaratnam is charged with conspiracy and securities fraud, accused of operating an elaborate insider trading operation in tech and other stocks through his hedge fund. Galleon Group had made Rajaratnam one of the wealthiest men in America, with an estimated net worth of $1.3 billionJohn Dowd, Rajaratnam's lawyer, told ABC News that his client "is innocent and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence."

Rajaratnam was a major contributor to the campaigns of Hillary Clinton and also the single largest known U.S. contributor to a charity linked to the Tamil Tigers in Sri Lanka, according to records obtained A Sri Lankan native, Rajaratnam gave more than $3.5 million to the Tamil Rehabilitation Organization (TRO), whose assets were frozen by the U.S. Treasury Department in Nov. 2007 because of alleged ties to the Tamil TigersAccording to documents filed with the IRS, Rajaratnam's contributions to the TRO were made in 2005 and 2006 through a separate charity, which he founded in the wake of the tsunami which hit Sri Lanka in Dec. 2004.

Despite its stated relief efforts, the Treasury Department described the TRO charity as "a front" for Tamil Tigers fundraising and procurement in the U.S.

"TRO passed off its operation as charitable, when in fact it was raising money for designated terrorist group responsible for heinous acts of terrorism," said Adam Szubin, director of the Treasury's Office of Foreign Assets Control at the time.

Who is Raj Rajaratnam? Don't ask in Sri Lanka

Billionaire hedge fund titan Raj Rajaratnam's shadow in Sri Lanka is so big that his arrest in the United States initially knocked 5 percent off the local stock market.

But ask about Rajaratnam on the island of birth and few will say anything about the man considered to be Sri Lanka's richest, now accused in the largest hedge-fund related insider trading case in U.S. history.

The silence speaks volumes about Sri Lanka's scarred modern history, and its persistent entanglement in suspicion brewed by the 25-year war with the separatist Liberation Tigers of Tamil Eelam (LTTE), which Sri Lanka won in May.

"I really can't speak about him," said one former associate, echoing the comments of many people Reuters spoke with.

In addition to the U.S. probe of Galleon, Sri Lankan officials are investigating Rajaratnam's finances after he made substantial donations in 2005 to a Tamil organisation that was subsequently banned for its links to the LTTE.

Even in post-war Sri Lanka, suspicion can lead to arrest, and the government has the authority to seize money it links to the LTTE, making those who know the man deeply cautious of any comment.

Another simpler factor may be at work, according to a letter his lawyers sent to a New York court seeking reduced bail terms and vowing that Rajaratnam would defend himself vigorously in the country he considers home.

"Mr. Rajaratnam is a 52-year-old citizen of the United States who, although born in Sri Lanka, has lived in the United States for nearly 30 years," the letter said.

As extraordinary as his success in building the Galleon Group hedge fund into a $7 billion (4 billion pound) behemoth at its peak, Rajaratnam's story is typical of hundreds of thousands of minority Tamils who almost entirely severed ties to Sri Lanka as it slid into ethnic conflict.

By the time full-blown civil war erupted in 1983, many Tamils with the means to do so like Rajaratnam's family had already left for Europe, North America and Australia for school and work.

Many sold their property and have never returned, instead forming a close-knit diaspora community.

The son of the chairman of the Sri Lankan arm of the Singer sewing machine company, Rajaratnam was born and raised into the privileged life of Colombo's post-independence elite. He grew up in Cinnamon Gardens, an enclave of Colombo dominated by grand, whitewashed colonial homes flanked by palm trees, and attended the prestigious St. Thomas Preparatory School in Colombo that has minted many of Sri Lanka's business and political leaders.

Rajaratnam left for England sometime in the mid-1970s, where he finished secondary school and graduated with an engineering degree from the University of Sussex in 1980.

By 1983, he earned an MBA from the University of Pennsylvania's Wharton SchoolOne longtime family friend in Canada said Rajaratnam and his family, who are Christians, were typical of the well-to-do Tamils who originated from the northern Jaffna peninsula, the capital of Sri Lankan Tamil culture that figured in many battles during the war.

"They focus on education and family, they are all successful and they are not bourgeois. They support each other," the friend said on condition of anonymity.

He expressed shock that Rajaratnam, who has two brothers and two sisters who are all American citizens, had been arrested.

"There is a difference in insider trading in Sri Lanka and the U.S. In Sri Lanka, that is the norm. But his family wouldn't stoop to these things," the friend said.

Sri Lanka's stock market has enjoyed a powerful surge since the end of the conflict in May, with the CSE All-Share index .CSE having doubled so far in 2009.

Although Sri Lanka has strict laws against insider trading, lawyers and brokers say enforcement is weak and the relatively small number of players in the market means there is a coziness in the financial community that is almost unavoidable.

Rajaratnam has not been accused of any wrongdoing in Sri Lanka's capital markets.

He rarely returns to Sri Lanka -- friends say he was last on the island in 2005, and stayed at the Union Hilton residential hotel when he came since he owns no property under his name.

He was in the country to supervise the millions in charitable contributions he had given to rebuilding areas of the country after the devastating December 26, 2004, tsunami, and to look at potential investments, friends say.

MONEY TRAIL

It was at that time that Rajaratnam first drew the Sri Lankan authorities' attention, namely because of the $5 million he gave to the Tamil Rehabilitation Organization (TRO) in 2005, which was among other donations he made to rebuild Sri Lanka after the tsunami.

"He gave money to the TRO before they were banned. Lots of people did that, especially after the tsunami struck," one financial professional who dealt with Rajaratnam told Reuters on condition of anonymity.

Those donations came two years before the U.S. government declared the TRO a front for the Tamil Tigers, in just one example of how the LTTE cloaked its fund-raising activities.

The LTTE's mafia-like control of Tamil cultural and charity groups worldwide helped generate $200-300 million a year, along with profits from gun-running, drug smuggling and extortion.

Rajaratnam's lawyers say an accusations in an October 22 civil lawsuit in New Jersey by victims of Tamil Tiger attacks accusing him of funding the separatist group are "untrue" and "libelous".

He denies involvement with the LTTE, which the United States and more than 30 other nations have designated a terrorist group. The central bank last month said its long-running investigations into Rajaratnam's finances were ongoing.

(Additional reporting by Shihar Aneez in Colombo, Grant McCool in New York and Saeed Azhar in Singapore; Editing by Lincoln Feast)