Several pension funds and endowments put money with the billionaire, helping him to build Galleon Group into one of the world's biggest hedge funds with $7 billion in assets at its peak. US financial regulators said the fund had $2.6 billion in assets as of March, according to Reuters.

Mr Rajaratnam has been charged, along with others, with making up to $20 million in illegal profits through a network of secret informants over several years.

The saga, regardless of the outcome, is bound to provoke more demands for tighter regulation of hedge funds, although some industry figures say there is no sure-fire way to prevent fraud and that due diligence checks on managers is essential.

Bloomberg, meanwhile, citing unnamed sources, said Galleon Group’s analysts, portfolio managers and traders will meet today in New York even as they raise cash to meet redemption requests.

Mr Rajaratnam was arrested on 16 October and released on $100 million bail. He spoke to his employees yesterday, telling them he will fight the charges, the news service said.

Redemption requests totaled $1.3 billion, the Wall Street Journal reported yesterday.