Son of a sewing machine boss enjoyed a rapid rise by trading on connections in the Asian community and world of technology
Just before his arrest in October 2009, Forbes magazine ranked Raj Rajaratnam as one of America's 400 richest men and the 559th richest in the world. The self-styled "king of kings" had amassed a fortune of just over $1bn (£611m) by creating one of the biggest hedge funds in the world – Galleon.
But after he was convicted of 14 charges of fraud and conspiracy, the Sri-Lankan born father of three was facing 20 years in jail and an end to his appearances in the much-watched Forbes table of the country's elite.
While he showed no reaction as the verdict was read out in the New York courtroom, Rajaratnam, 53, was known for his facial expressions and ability to make his presence known in any room. The Wall Street Journal described the well-built fund manager as having a "broad toothy smile" and Rajaratnam regularly referred to himself as the "king of kings" – as two elements of his name included the word Raj, the Hindi expression for king.
He told interviewers that he regarded himself as "focused" and reckoned his favourite quote was "only the paranoid survive", the title of a book by Andrew Grove, who helped found Intel, eventually becoming its chairman. This should be no surprise. It was investing in such technology companies – and, it is now known, having inside information on them – that was the route to his fortune and his downfall.
A former Intel executive, Rajiv Goel, has already admitted insider dealing after providing information to Rajaratnam, who tapped close associates – and often members of the Asian community and co-students at US college Wharton – for the crucial information that allowed his fund to keep outperforming others through the 2008 banking crisis.
The young Rajaratnam had a comfortable start to his life in Sri Lanka, where his father ran the Asian arm of the Singer sewing machine company. He was educated locally before studying engineering at Sussex University and moving to the US in 1981 to study for an MBA at Wharton. His financial career began with a short stint at Chase Manhattan, where he specialised in lending to technology companies. He was then hired by boutique investment bank Needham & Co, where he rose through the ranks to president in 1991.
It was at Needham – a technology specialist – that Galleon was born in 1992, first as Needham Emerging Growth Partners, before Rajaratnam took over the fund when he left to go it alone in 1996 and focus on investing. "One of the primary reasons I left Needham was to focus on the investment management side. I was spending two to three hours a day as a shrink, dealing with people issues, organisational issues and strategic planning issues," he said in an interview afterwards.
At Galleon he earned a reputation as a keen investor – and one who enjoyed jokes. On one occasion, an employee succumbed to his offer of $5,000 to be zapped by a stun-gun from Taser International during an investment pitch. She promptly fell to her knees, according to the Wall Street Journal, which did not report whether the proof of the technology was enough to convince Rajaratnam to invest.