Wealthy Donor

WASHINGTON, October 18, 2009 (AFP) – A US-based hedge-fund billionaire charged as part of an insider-trading case was investigated by US authorities for allegedly raising funds for a Sri Lankan separatist group, The Wall Street Journal reported late Saturday. Citing people familiar with the probe, the newspaper said federal agents had uncovered documents showing that Raj Rajaratnam, founder of the Galleon Group, was among several wealthy Sri Lankans in the United States whose donations to a Maryland-based charity made their way to the Liberation Tigers of Tamil Eelam.

The LTTE, commonly known as the Tamil Tigers, fought a brutal separatist war against the government of Sri Lanka from 1976 until it was defeated last May.

Rajaratnam, 52, was among six people arrested Friday in what the Federal Bureau of Investigation said is the largest-ever, hedge-fund insider-trading case, the paper noted.

Federal prosecutors in New York charged Rajaratnam with securities fraud and conspiracy to commit securities fraud.

Prosecutors allege Rajaratnam and his ring of alleged co-conspirators earned 20 million dollars in improper gains, the report said.

Rajaratnam’s New York-based Galleon fund firm manages 3.7 billion dollars in investments.