Born in Sri Lanka, Rajaratnam, a Tamil self-made billionaire hedge fund manager, is the 236th richest American according to Forbes magazine (2009) with an estimated net worth of $1.8 billion. He was ranked 262nd richest American in 2008 and as of early 2009, is the richest Sri Lankan in the world. As of 2009, his $1.2 billion Diversified Fund has returned 22.3% according to an investor letter.
Rajaratnam started his career as a lending officer at the 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. At the company’s behest, he started a hedge fund, Needham Emerging Growth Partnership in March 1992, which he later bought and renamed ‘Galleon’.
His hedge fund is currently valued at $3.7 billion, down from its peak of $7 billion in 2008. After his arrest, Galleon has received requests from investors for withdrawal of $1.3 billion.
On Friday October 16, 2009, Raj Rajaratnam was arrested by the FBI and accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc. U.S. Attorney Preet Bharara, putting total profits in the scheme at $20.6 million, told a news conference it was the largest hedge fund case ever in insider information and then caused the Galleon Technology Funds to execute trades that earned a profit of more than $12.7 million between January 2006 and July 2007.