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October 5, 2011

Sri Lankan Terrorism: Convicted insider trader continues to be investigated for supporting terrorism

Sri Lankan-born American and founder of the hedge fund management firm Galleon Group, Raj Rajaratnam, was found guilty in May 2011 in U.S. criminal court of all charges against him, including five counts of conspiracy and nine counts of securities fraud. A recent article in Vanity Fair discussed Rajaratnam's alleged financial support of terrorism via resources he provided to the Sri Lankan terrorist group the Liberation Tigers of Tamil Elam (LTTE), both personally and through charitable fronts. He was arrested on criminal charges in October 2009, just days before victims of LTTE terror attacks and their families filed a civil lawsuit against Rajaratnam and his father for financially supporting the LTTE and its violence. The plaintiffs are represented by Motley Rice member and anti-terrorism attorney Michael Elsner. As stated in the criminal case U.S. v. Rajaratnam (S.D.N.Y.), Rajaratnam earned more than $60 million in insider trading profits.

In the Vanity Fair article, David Rose wrote about meeting with Elsner, "Insider trading is not exactly a victimless crime, but to work out who is doing the suffering involves calculations that verge on the hypothetical. Elsner's clients, in contrast, suffered concretely and very directly. In his office he showed me a video compiled from interviews he had conducted in Sri Lanka. They're heartbreaking. Parents—some of them, in Sri Lanka's multicultural society, Tamil themselves—talk about losing their children in horrifying circumstances, such as the destruction of a high-school baseball team caught in a blast at a Colombo railway station, or a young couple blown up two months before their wedding, and who were buried in the clothes they never got to wear at the ceremony."

Plaintiffs in the civil case Krishanthi, et al. v. Rajaratnam, et al. (D.N.J.), allege Rajaratnam and the Rajaratnam Family Foundation donated more than $5 million to the Tamil Rehabilitation Organization (TRO). Between 2001 and 2007, the U.S. Department of Treasury designated the TRO as a "charitable organization that acts as a front to facilitate fundraising and procurement for the LTTE."

At the time of his arrest, Rajaratnam was the wealthiest Sri Lankan-born individual in the world and, according to Forbes magazine, the 236th richest American and  559th on list of wealthiest people in the world with a net worth of approximately $1.8 billion. As a result of his criminal conviction, the government is seeking a prison sentence of 20 years.

Learn more about the anti-terrorism litigation that Motley Rice attorneys have filed for their clients against the alleged financiers and material supporters of terrorist organizations around the world.