 "Rajat Gupta to surrender in Wall St insider trading case")
Rajat Gupta’s wildly successful corporate career may be about to end in infamy.
The man who rose from a lower-middle-class Kolkata family to Harvard Business School and then went on to become the head ofinternational consulting firm McKinsey and a director at Goldman Sachs is expected to surrender to the FBI on Wednesday, according to media reports.
Gupta, 62, faces criminal charges that he leaked insider information to Raj Rajaratnam, founder of the Galleon Group hedge fund, who was sentenced last fortnight to 11 years in prison for insider trading.
[caption id=“attachment_21601” align=“alignleft” width=“380” caption=“Rajat Gupta faces criminal charges of passing on confidential information to hedge fund trader Raj Rajaratnam. Reuters”]  [/caption]
The case marks the biggest crackdown on insider trading in US history.
In evidence presented during the Sri Lankan-born Rajaratnam’s trial, prosecutors said that Gupta called Rajaratnam nine times in 2008 and 2009 - often within minutes of learning confidential details at Goldman board meetings - and gave him information to make trades.
This included information that legendary investor Warren Buffett’s Berkeshire Hathaway had made a $5 billion investment in Goldman Sachs - and, additionally, about Goldman’s first ever quarterly loss as a public company, the Journal reports.
Gupta also faces charges that he leaked information about the corporate earnings of Proctor & Gamble, on whose board he served as director.
Prosecutors have claimed that Rajaratnam profited to the extent of $50 million on the illegal trades.
Impact Shorts
More ShortsThe Securities and Exchange Commission, the top regulatory body that oversees Wall Street, had previously accused Gupta of insider trading, but had dropped its civil case after Gupta sued the SEC back and denied allegations of wrongdoing.
Gupta’s attorney Gary Naftalis issued a statement asserting that Gupta had done no wrong.
“Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless. The facts demonstrate that Mr Gupta is an innocent man and that he has always acted with honesty and integrity. He did not trade in any securities, did not tip Mr Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo.”
Rajaratnam, who is under house arrest in Manhatton, had told _The Daily Beast_ days ago that prosecutors had pressed him to turn on Gupta and wiretap their conversations.
“They wanted me to plea bargain,” Rajaratnam told The Daily Beast. “They want to get Rajat. I am not going to do what people did to me. Rajat has four daughters.”
Earlier on Firstpost
The incredibly tangled web that Rajat Gupta wove
They pressed me to turn on Rajat Gupta: Raj Rajaratnam
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