Friday Jun 15, 201210:23 PM GMT
Jury convicts ex-Goldman Sachs director of insider trading
Fri Jun 15, 2012 10:22PM
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former Goldman Sachs board member Rajat Gupta

  

Jurors in a Manhattan federal court Friday found former Goldman Sachs board member Rajat Gupta guilty of conspiracy and securities fraud, only two days after closing arguments ended in the closely watched insider trading case.

 

Gupta, 63, was found guilty of passing on nonpublic information from Goldman Sachs board meetings to now-jailed hedge fund manager Raj Rajaratnam, but the jury didn't convict him on two charges, including an allegation that Gupta had also leaked information about discussions of the Procter & Gamble board, on which he also served.

 

The conviction represents a tragic fall for Gupta, a Harvard graduate and corporate titan who was a former chief of McKinsey & Co., a top corporate consulting firm.

 

Sentencing in the case is scheduled for Oct. 18. Gupta faces up to 20 years in prison, according to the Wall Street Journal, which says his sentence, will likely be lower. Rajaratnam was sentenced in October to 11 years in prison for insider trading. Huffington Post

 

HIGHLIGHTS

 

Two of the securities fraud counts Gupta was found guilty of related to a tip about a Warren Buffet investment that he passed to Galleon Group founder Raj Rajaratnam before it was announced to the public on Sept. 23, 2008. nydailynews.com

 

Gupta called Rajaratnam a minute after taking part in a conference call with his Goldman Sachs colleagues at which the bank's boss, Lloyd Blankfein, announced billionaire investor Warren Buffett planned to invest $5bn in it. The Guardian

 

Galleon, Rajaratnam's hedge fund, bought $43m of Goldman stock in the final three minutes of the trading day and made nearly $1m on the trade. Blankfein was called to testify in the case. The Guardian

 

The case brought by Manhattan U.S. attorney Preet Bharara controversially used wiretaps to gather evidence, a technique more usually associated with mafia cases. wrnews.org

 

Gupta's lawyers had objected to the use of information gathered in wiretaps, but district judge Jed Rakoff ruled that prosecutors could play three tapes for jurors. wrnews.org

 

So far 66 cases have been brought against people involved in the insider dealing associated with Galleon, once a $7bn hedge fund. Gupta is the 62nd person to be convicted or to have pleaded guilty out of 68 people charged since 2009. So far no-one charged has been found not guilty. wrnews.org

 

AN/SM

 

 

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