Rajat Gupta a former Goldman Sachs board member has been convicted on insider trading charges by a court in New York.
Gupta, 63, who denied illegally leaking boardroom secrets to former hedge fund manager Raj Rajaratnam – co-founder of Galleon Group LLC, who is currently serving an 11-year prison sentence – will be sentenced on 18 October when he could be sent to jail for up to 20 years.
The jury acquitted Gupta, a former managing partner of McKinsey & Co, of two other charges of securities fraud.
Prosecutors said that Gupta abused his privileged status to supply insider tips to Rajaratnam, including an incident where, minutes after listening to a private conference call discussing a USD5bn investment in Goldman Sachs by Warren Buffet’s company Berkshire Hathaway, Gupta disclosed details of the deal to Rajaratnam ahead of the official announcement. Galleon earned USD1 million on the back of the leak after purchasing USD43 million of Goldman stock.
Gupta was also accused of leaking information about Procter & Gamble, where he was also a director.
Gupta, who was born in India and educated at Harvard, is the highest profile figure to be convicted since Rajaratnam in a case that has so far seen 66 prosecutions brought against those involved with Galleon’s insider dealing activities. He is the 62nd person to be convicted out of 68 charged since 2009.