Sri Lanka war victims sue Rajaratnam in U.S. court

By Grant McCool

NEW YORK (Reuters) - Accused hedge fund billionaire Raj Rajaratnam and his family's foundation were sued in a U.S. court on Thursday over allegations that they provided $5 million to Tamil Tigers militants in his native Sri Lanka's civil war.

The lawsuit in U.S. District Court in New Jersey on behalf of 30 people who were victims or survivors of attacks by the Liberation Tigers of Tamil Eelam in the South Asian country's civil war said the money assisted "crimes against humanity."

Last Friday, Rajaratnam and five others were criminally charged by U.S. prosecutors and the FBI in New York in what they described as the biggest hedge fund insider trading case ever.

The Sri Lankan is known for his charitable donations and denies allegations that money found its way to the LTTE. Last month, the Sri Lankan government accepted his pledge of $1 million to rehabilitate former LTTE fighters after the end of the 25-year-long war in May.

"The accusation that Mr. Rajaratnam supported the LTTE is flatly untrue and libelous, and we are confident that the court will dismiss these baseless charges," Rajaratnam's lawyer Jim Walden said in a statement.

"Mr. Rajaratnam has the greatest sympathy for all victims of violence in Sri Lanka and has a long history of helping Sri Lankans of all ethnic groups through substantial charitable donations over many years."

The lawsuit names Rajaratnam, his father J.M. Rajaratnam and the Tamil Rehabilitation Organization (TRO) foundation, which had a branch in New Jersey during the 2001 to 2007 period covered by the civil lawsuit. The foundation's funds have been frozen in both Sri Lanka and the United States.

It accuses them of "aiding and abetting, intentionally facilitating and/or disregarding crimes against humanity in violation of international law."