Raj Rajaratnam - Wikipedia, the free encyclopedia

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Raj Rajaratnam
From Wikipedia, the free encyclopedia

Raj Rajaratnam (Tamil: w {  ; born June 15, 1957) is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm.[3][4] On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close.[5] He stood trial in U.S. v Rajaratnam (09 Cr. 01184) in the United States District Court for the Southern District of New York, and on May 11, 2011 was found guilty on all 14 counts of conspiracy and securities fraud.[6][7] On October 13, 2011, Rajaratnam was sentenced to 11 years in prison[8] and fined with a civil penalty of $92.8 million in November 2011.[9]

Raj Rajaratnam
Born June 15, 1957 [1] Colombo, Dominion of Ceylon (now Sri Lanka) Ethnicity Tamil

Citizenship American Occupation Hedge fund manager Net worth Unknown

(formerly peaked at US$1.8 billion)
[2]

Spouse Children

Asha Pabla Three

Contents
1 Background and career 2 Contributions to charitable and political organizations 2.1 Controversy 3 Conviction and imprisonment for insider trading 4 Film 5 References

Background and career

Rajaratnam, an ethnic Sri Lankan Tamil was born in Colombo in the Dominion of Ceylon, present-day Sri Lanka. His father was the head of the Singer Sewing Machine Co. in South Asia.[10] According to the newspaper The Island, he attended S. Thomas' College, Mount Lavinia, though other sources say he attended S. Thomas' Preparatory School, Kollupitiya.[11][12] Rajaratnams family emigrated to England in 1971, "sensing that the [post-independence Sri Lankan ethnic] situation would get more violent". Rajaratnam studied engineering at the University of Sussex and then earned an M.B.A. from Wharton School of the University of Pennsylvania in 1983.[10] He is married with three children and maintains residences in Connecticut, New York, Georgetown (DC) and Florida. According to Forbes magazine, Rajaratnam is a self-made billionaire hedge fund manager. He was the 236th richest American in 2009, with an estimated net worth of $1.8 billion.[4] He was the 262nd richest American in 2008, with an estimated net worth of $1.5 billion.[13] In 2009 he was the richest Sri Lankan-born individual in the world. Rajaratnam started his career as a lending officer at 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.[14] At the company's behest, he started a hedge fund the Needham Emerging Growth Partnership in March 1992, which he later bought and renamed Galleon.

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His hedge fund was valued at $3.7 billion in 2009, down from a peak of $7 billion in 2008. According to a 2009 investor letter his $1.2 billion Diversified Fund had a net annualized return of 22.3%.[14] Rajaratnam has been featured among the elite US money managers in a book called The New Investment Superstars. Initially invested in technology stocks and healthcare companies, he says his best ideas came from frequent visits with companies and conversations with executives who invest in his fund.[15] After his arrest, Galleon received requests from investors for the withdrawal of $1.3 billion, causing the fund to close.[16] In a letter dated October 21, 2009, Rajaratnam informed his employees and investors that he intended to wind down all the hedge funds of the Galleon Group. Investors received their entire money back in January 2010, plus profits.[17]

Contributions to charitable and political organizations

In November 2009, Rajaratnam pledged to donate $1 million to help with the rehabilitation of the LTTE combatants.[18] 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.[19] He helped Sri Lankans recover after the 2004 Tsunami.[20] 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 $118,000 in political contributions in the past five years.[21] He has also contributed to the Democratic National Committee and various campaigns on behalf of Barack Obama, Hillary Rodham Clinton, Charles Schumer, and Robert Menendez.[21]

Controversy
He has also contributed $3.5 million to the Tamils Rehabilitation Organisation (TRO), a group whose assets were frozen by the USA due to its alleged close connections to the Tamil Tigers (LTTE) which are proscribed as a terrorist organization in 32 countries.[22][23][24] TRO's offices were raided by the FBI in 2006 but the organization was never charged with any wrongdoing.[25] Selvarasa Pathmanathan, who was appointed LTTE chief after the death of Prabhakaran has said that Rajaratnam contributed lavishly to the LTTE and its sympathizers in the West.[26] The Sri Lankan government has stated that 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.[27] However, the senior military official could not give specific details about the alleged contributions to the LTTE. Rajaratnam had recently pledged a $1 million to rehabilitate former LTTE combatants.[18]

Conviction and imprisonment for insider trading

On Friday October 16, 2009, Raj Rajaratnam was arrested by the FBI and accused of conspiring with others in insider trading in several publicly traded companies. U.S. Attorney Preet Bharara put the total profits in the scheme at over $60 million, telling a news conference it was the largest hedge fund insider trading case in United States history.[5][28] Jim Walden, an attorney for Mr. Rajaratnam, said his client is innocent and will fight the insider-trading charges.[29] Rajaratnam allegedly profited from information received from: Robert Moffat, an senior executive of IBM considered next in line to be CEO[30] Anil Kumar, a senior executive of McKinsey & Company and close friend of Rajat Gupta (its former CEO) who was later also accused of passing information to Rajaratnam

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Rajiv Goel, a midlevel Intel Capital executive Roomy Khan, previously convicted of wire fraud for providing inside information from her employer, Intel, to Rajaratnam.[31] It was reported that Rajaratnam, Goel and Kumar were all part of the class of 1983 from Wharton business school.[32] The Sri Lankan stock market fell sharply after his arrest on insider trading charges in October 2009.[33] Sri Lanka's Securities and Exchange Commission is reviewing the active stock trading of Raj Rajaratnam with a view of identifying any insider trading.[34] It said he also conspired to get confidential information on the $5 billion purchase by Warren Buffetts Berkshire Hathaway of Goldman preferred stock before the September 2008 announcement of that transaction. The Wall Street Journal reported in April that a former member of the board of directors of Goldman Sachs and former McKinsey & Company chief executive Rajat Gupta told Rajaratnam about Berkshire's investment before it became public.[35] Gupta stood to profit as would-be chairman of Galleon International, a co-founder of New Silk Route with Rajaratnam, and as a friend of Rajaratnam. In March 2011 Gupta was charged in an administrative proceeding by the SEC. Gupta maintained his innocence, countersued, won dismissal of the administrative charge, then was arrested on criminal charges. On May 11, 2011, Rajaratnam was found guilty on all 14 counts of conspiracy and securities fraud.[36] On October 13, 2011, Rajaratnam was sentenced to 11 years in prison.[37] This is the longest prison sentence ever handed out for insider trading.[38] The thirteen other defendants connected to Rajaratnam's case received prison sentences averaging three years each.[38] Just before Rajat Gupta's arrest in October, 2011, Rajaratnam was reported to have said that the prosecutors had wanted him to wear a wire and tape his conversations with Gupta. "It was Rajaratnams understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time," the report continued. Rajaratnam had not yet at that point, however, cooperated with the prosecutors and had received his 11-year sentence. There was no sign that he would cooperate at any future point.[10] Rajaratnam is serving his 11-year sentence in Ayer, Massachusetts.[39]

Film
108 Production has announced a film entitled "Billion Dollar Raja" inspired by the story of Raj Rajaratnam described as "an investigative financial mafia drama inspired by the true story of Galleon Group founder Mr. Raj Rajaratnam, his network of Wall Street honchos, big corporate insiders, employees and a prosecution team determined to punish those involved in the most complex insider trading case in history through secret wire-tap recordings." The film will be written and directed by Nayan Padrai and produced by Sheetal Vyas.
[40]

References
1. ^ Berenson, Alex (2009-11-09). "Swagger in the Spotlight" (http://www.nytimes.com/2009/11/02/business/02insider.html?sq=Swagger%20in%20the% 20Spotlight&st=cse&scp=1&pagewanted=all) . New York Times. http://www.nytimes.com/2009/11/02/business/02insider.html?sq=Swagger%20in%20the% 20Spotlight&st=cse&scp=1&pagewanted=all. Retrieved 2011-05-12. 2. ^ "#262 Raj Rajaratnam: The Forbes 400 Richest Americans 2009" (http://www.forbes.com/lists/2009/54/rich-list09_Raj-Rajaratnam_RUQ2.html) . Forbes. 3. ^ Berenson, Alex (November 2, 2009). "For Galleon Executive, Swagger in the Spotlight" (http://www.nytimes.com/2009/11/02/business/02insider.html?pagewanted=1&_r=1) . New York Times. http://www.nytimes.com/2009/11/02/business/02insider.html?pagewanted=1&_r=1. Retrieved 2009-11-02.

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4. ^ a b "#236 Raj Rajaratnam" (http://www.forbes.com/lists/2009/54/rich-list-09_Raj-Rajaratnam_RUQ2.html) . Forbes. http://www.forbes.com/lists/2009/54/rich-list-09_Raj-Rajaratnam_RUQ2.html. Retrieved 2009-02-19. 5. ^ a b Michael J. De La Merced; Zachery Kouwe (October 18, 2009). "Arrest of Hedge Fund Chief Unsettles the Industry" (http://www.nytimes.com/2009/10/19/business/19insider.html?hp) . The New York Times. http://www.nytimes.com/2009/10/19/business/19insider.html?hp. Retrieved October 19, 2009. 6. ^ Rajaratnam Guilty on All Counts in U.S. Insider-Trading Case (http://www.bloomberg.com/news/2011-0511/rajaratnam-is-found-guilty-of-all-counts-in-galleon-insider-trading-trial.html) , http://www.bloomberg.com/news/2011-05-11/rajaratnam-is-found-guilty-of-all-counts-in-galleon-insider-tradingtrial.html 7. ^ Whitehouse, Kaja (May 11, 2011). "Raj guilty on all 14 counts, New York Post, May 11, 2011" (http://www.nypost.com/p/news/business/jury_reaches_verdict_in_galleon_BLOFURM2jShtjx3zRbfM9I) . New York Post. http://www.nypost.com/p/news/business/jury_reaches_verdict_in_galleon_BLOFURM2jShtjx3zRbfM9I. Retrieved October 17, 2011. 8. ^ Irwin, Neil (February 28, 2011). "Hedge fund billionaire gets 11-year sentence in fraud case" (http://www.washingtonpost.com/business/economy/hedge-fund-billionaire-gets-11-year-sentence-in-fraudcase/2011/10/13/gIQAa0PZhL_story.html) . The Washington Post. http://www.washingtonpost.com/business/economy/hedge-fund-billionaire-gets-11-year-sentence-in-fraudcase/2011/10/13/gIQAa0PZhL_story.html. Retrieved October 17, 2011. 9. ^ "Judge fines Rajaratnam $92 million" (http://www.hindustantimes.com/world-news/Americas/Judge-finesRajaratnam-92-million/Article1-766652.aspx) . Associated Press (New York: Hindustan Times). November 9, 2011. http://www.hindustantimes.com/world-news/Americas/Judge-fines-Rajaratnam-92-million/Article1766652.aspx. Retrieved 6 December 2011. 10. ^ a b c Mehta, Suketu, "The Outsider: In an exclusive interview, Raj Rajaratnam reveals ..." (http://www.thedailybeast.com/newsweek/2011/10/23/exclusive-raj-rajaratnam-reveals-why-he-didn-ttake-a-plea.html) , The Daily Beast, October 23, 2011 10:00 AM EDT. Retrieved 2011-10-26. 11. ^ "First Guardian Equities Raj Rajaratnam Shareholder profile" (http://www.firstguardianequities.com/shareholders.php) . http://www.firstguardianequities.com/shareholders.php. 12. ^ "Bloomberg Raj Rajaratnam profile" (http://www.bloomberg.com/apps/news? pid=20601109&sid=aqnyyKZFiLTY) . October 19, 2009. http://www.bloomberg.com/apps/news? pid=20601109&sid=aqnyyKZFiLTY. 13. ^ "#262 Raj Rajaratnam" (http://www.forbes.com/lists/2008/54/400list08_Raj-Rajaratnam_RUQ2.html) . Forbes. September 17, 2008. http://www.forbes.com/lists/2008/54/400list08_Raj-Rajaratnam_RUQ2.html. Retrieved 2009 -02-19. 14. ^ a b Burton, Katherine; Saijel Kishan (2009-10-19). "Raj Rajaratnam Became Billionaire Demanding Edge" (http://www.bloomberg.com/apps/news?pid=20601109&sid=aDg9U7NGeNv4) . Bloomberg. http://www.bloomberg.com/apps/news?pid=20601109&sid=aDg9U7NGeNv4. Retrieved 2009-10-19. 15. ^ Lois Peltz, The New Investment Superstars, Wiley, 2001. ISBN 978-0471403135 16. ^ Pulliam, Susan; Gregory Zuckerman (October 20, 2009). "Galleon Clients Abandon Ship" (http://online.wsj.com/article/SB125599945778395523.html?mod=WSJ_hps_MIDDLESecondNews) . The Wall Street Journal. http://online.wsj.com/article/SB125599945778395523.html? mod=WSJ_hps_MIDDLESecondNews. Retrieved 2009-10-20. 17. ^ Checkler, Joseph (October 21, 2009). "Galleon to Wind Down Hedge Funds" (http://online.wsj.com/article/SB125613042653698825.html?mod=WSJ_hps_LEFTWhatsNews) . The Wall Street Journal. http://online.wsj.com/article/SB125613042653698825.html? mod=WSJ_hps_LEFTWhatsNews. Retrieved 2009-10-21. 18. ^ a b "Raj Rajaratnams million dollars A fine starting point" (http://www.island.lk/2009/09/27/features1.html) . http://www.island.lk/2009/09/27/features1.html. 19. ^ "Corporate And Private Donors Contribute $120,000 Funding Six Mine Detection Dogs For Humanitarian Demining In Sri Lanka" (http://www.slembassyusa.org/press_releases/winter_2003/US_donors_six_mine_21jan04.html) . http://www.slembassyusa.org/press_releases/winter_2003/US_donors_six_mine_21jan04.html. 20. ^ "Helping Out the Homeland" (http://www.tsunamireliefinc.org/press3.html) . http://www.tsunamireliefinc.org/press3.html. 21. ^ a b RICHARD ESPOSITO, KRISTIN JONES, ANNA SCHECTER and BRIAN ROSS (16October 2009). "Raj Rajaratnam Indicted in $20 Million Insider Trading Case ABC News" (http://abcnews.go.com/Blotter/rajrajaratnam-indicted-20-million-insider-trading-case/story?id=8845975) . ABC News. http://abcnews.go.com/Blotter/raj-rajaratnam-indicted-20-million-insider-trading-case/story?id=8845975. Retrieved May 12, 2011. 22. ^ "BBCSinhala.com | Sandeshaya | Indian Court upholds LTTE ban" (http://www.bbc.co.uk/sinhala/news/story/2008/11/081111_india_ltte.shtml) . BBC. http://www.bbc.co.uk/sinhala/news/story/2008/11/081111_india_ltte.shtml. Retrieved October 17, 2011.

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23. ^ Daya Gamage US National Correspondent Asian Tribune. "Raj Rajaratnam simultaneously funds Sri Lanka terror group and US Democratic Party" (http://www.asiantribune.com/news/2009/10/18/raj-rajaratnamsimultaneously-funds-sri-lanka-terror-group-and-us-democratic-party) . Asian Tribune. http://www.asiantribune.com/news/2009/10/18/raj-rajaratnam-simultaneously-funds-sri-lanka-terror-group-and-usdemocratic-party. Retrieved 2010-08-11. 24. ^ Daya Gamage US National Correspondent Asian Tribune. "Sri Lanka born Raj Rajaratnam indicted by FBI for alleged insider trading in New York" (http://www.asiantribune.com/news/2009/10/17/sri-lanka-born-raj-rajaratnam -indicted-fbi-alleged-insider-trading-new-york) . Asian Tribune. http://www.asiantribune.com/news/2009/10/17/sri -lanka-born-raj-rajaratnam-indicted-fbi-alleged-insider-trading-new-york. Retrieved 2010-08-11. 25. ^ Officials Say Investor's Donations Wound Up With Sri Lanka Rebels (http://online.wsj.com/article/SB125583082290592413.html) , The Wall Street Journal, October 19, 2009. 26. ^ "Rajaratnam lavishly contributed to LTTE" (http://www.hindustantimes.com/Rajaratnam-lavishly-contributedto-LTTE/Article1-468582.aspx) . Hindustan Times. India. October 23, 2009. http://www.hindustantimes.com/Rajaratnam-lavishly-contributed-to-LTTE/Article1-468582.aspx. Retrieved October 17, 2011. 27. ^ Financial Times.com 'Sri Lanka claims Rajaratnam gave Tamil Tigers millions' (http://www.ft.com/cms/s/0/9629749a-bc17-11de-9426-00144feab49a.html) by James Fontanella-Khan. Published on October 18, 2009. 28. ^ "SEC Charges Billionaire Hedge-Fund Manager with Insider Trading Dispatch WSJ" (http://blogs.wsj.com/dispatch/2009/10/16/sec-charges-billionaire-hedge-fund-manager-with-insidertrading) . The Wall Street Journal. 2009-10-16. http://blogs.wsj.com/dispatch/2009/10/16/sec-charges-billionairehedge-fund-manager-with-insider-trading. Retrieved 2010-08-11. 29. ^ Post (2009-10-19). "Officials Say Investor's Donations Wound Up With Sri Lanka Rebels" (http://online.wsj.com/article/SB125583082290592413.html) . The Wall Street Journal. http://online.wsj.com/article/SB125583082290592413.html. Retrieved 2010-08-11. 30. ^ Bandler, James (July 6, 2010). "Dangerous liaisons at IBM: Inside the biggest hedge fund insider-trading ring" (http://money.cnn.com/2010/07/06/news/companies/ibm_insider_trading.fortune/index.htm) . CNN. http://money.cnn.com/2010/07/06/news/companies/ibm_insider_trading.fortune/index.htm. 31. ^ USDC NDCA case no. 5:01-cr-20029-JW USA v. Khan 32. ^ O'Connor, Sarah (2009-10-20). "Class of '83 author recalls 'likeable'guy" (http://www.ft.com/cms/s/0/ad9ce6dcbd04-11de-a7ec-00144feab49a.html?nclick_check=1) . Financial Times. http://www.ft.com/cms/s/0/ad9ce6dcbd04-11de-a7ec-00144feab49a.html?nclick_check=1. Retrieved 2009-10-21. 33. ^ "Sri Lanka Stocks Fall on Rajaratnams Fund Redemption Concerns" (http://www.bloomberg.com/apps/news? pid=20601080&sid=aRnQ0VGFEWqk) . Bloomberg. October 20, 2009. http://www.bloomberg.com/apps/news? pid=20601080&sid=aRnQ0VGFEWqk. 34. ^ "Sri Lanka Investigates Rajaratnam" (http://www.lankaenews.com/English/news.php?id=8531) . lankaenews.com. http://www.lankaenews.com/English/news.php?id=8531. Retrieved 2010-08-11. 35. ^ McCool, Grant (2010-05-14). "Exclude Goldman, other stocks from case: Rajaratnam" (http://www.reuters.com/article/idUSTRE64D3LI20100514) . Reuters. http://www.reuters.com/article/idUSTRE64D3LI20100514. Retrieved 2010-08-11. 36. ^ Lattman, Peter; Ahmed, Azam (2011-05-11). "Galleon's Rajaratnam Found Guilty" (http://dealbook.nytimes.com/2011/05/11/rajaratnam-found-guilty/?hp) . New York Times. http://dealbook.nytimes.com/2011/05/11/rajaratnam-found-guilty/?hp. Retrieved 2011-05-11. 37. ^ Bray, Chad; Pulliam, Susan (October 14, 2011). "Rajaratnam Gets 11 Years in Insider-Trading Case" (http://online.wsj.com/article/SB10001424052970203914304576627191081876286.html? mod=WSJ_hp_LEFTTopStories) . The Wall Street Journal: p. A1. http://online.wsj.com/article/SB10001424052970203914304576627191081876286.html? mod=WSJ_hp_LEFTTopStories. Retrieved October 13, 2011. 38. ^ a b Lattman, Peter (October 13, 2011). "Galleon Chief Sentenced to 11-Year Term in Insider Case" (http://dealbook.nytimes.com/2011/10/13/rajaratnam-is-sentenced-to-11-years/?google_editors_picks=true) . Dealbook.nytimes.com. http://dealbook.nytimes.com/2011/10/13/rajaratnam-is-sentenced-to-11-years/? google_editors_picks=true. Retrieved October 17, 2011. 39. ^ Jeffrey, Don, "Rajat Gupta Lawsuit Dismissal Opposed by Goldman Investor" (http://www.bloomberg.com/news/2011-12-07/rajat-gupta-lawsuit-dismissal-opposed-by-goldmaninvestor-1-.html) , Bloomberg, December 7, 2011 6:02 pm ET. Retrieved 2011-12-18. 40. ^ Szalai, Georg (2011-10-27). "108 Production Plans Film About Hedge Fund Manager Convicted of Fraud" (http://www.hollywoodreporter.com/news/108-production-plans-film-hedge-254183) . The Hollywood Reporter. http://www.hollywoodreporter.com/news/108-production-plans-film-hedge-254183. Retrieved 2011-1027.

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American people convicted of fraud Financial scandals American hedge fund managers Old Alleynians Old Thomians People convicted of insider trading Prisoners and detainees of the United States federal government Sri Lankan Tamil businesspeople Wharton School alumni This page was last modified on 28 December 2011 at 12:41. Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. See Terms of use for details. Wikipedia is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.

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