Sri Lanka’s benchmark stock index was set for its biggest decline in four months following the arrest of Rajaratnam, who was one of the south Asian island’s biggest investors, Bloomberg reports.

Federal authorities have charged Rajaratnam and five others, some of them working for some of America’s most respected corporations with running a series of trades based on leaked insider information. The trades, investigators have said, added up to $20 million.

In addition to Rajaratnam, the following people were arrested in Friday: Rajiv Goel, of Intel Corp.; Anil Kumar, a director at global management-consulting firm McKinsey & Co.; Danielle Chiesi and Mark Kurland of New Castle Partners LLC, the one-time equity hedge fund group at Bear Stearns Asset Management Inc.; and Robert Moffat, a senior vice president at IBM.

The case involves the stocks of some of America’s top companies, including Google and Advanced Micro Devices.

Rajaratnam's bail was set at $100 million, secured by $20 million in assets, and guaranteed by his wife and four others. He was also forced to surrender his passport. He had booked two tickets to London upon learning an associate had been wearing a wire before being arrested Friday at his Upper East Side apartment, the New York Post reported. Rajaratnam’s movements were restricted to a 110-mile radius around New York.

Kumar was released on a $5 million bond, Kurland on a $3 million bond, and Moffat and Chiesi were each released on $2 million bond. Goel, who was arrested in California, posted $300,000 cash bail.

Chiesi, Kurland and Moffat’s attorneys said their clients would plead innocent. Galleon officials have said they were shocked by their co-founder’s arrest, and that the firm remained strong and liquid.

Prosecutors say the methods they use to bust Rajaratnam’s ring are a sign of things to come.

For the first time ever in an insider trading case, investigators used wire taps on several of the suspects’ phones to gather evidence, the same kind of tactic more likely in the past to be directed at a member of the Gambino Family than a respected Wall Street trader or corporate executive.

U.S. Attorney Preet Bharara in Manhattan said the fact that such methods were used in this case should be taken as a signal by others on Wall Street that Washington is watching them, and may well be listening as well.

"This case should be a wake up call for Wall Street. It shows that we are targeting white-collar insider trading rings with the same powerful investigative techniques that have worked so successfully against the mob and drug cartels," he said.

Investigators have been building their case since November 2007.

Walden, though, said prosecutors are overplaying the evidence they have against Rajaratnam and his cohorts. The case isn’t as strong as prosecutors claim, Rajaratnam’s lawyer said.

“This is a simple insider trading case,” Walden told Bloomberg.