Wall Street power player brings to light insider trading schemes.
Rajat Gupta, a former Goldman Sachs, Procter & Gamble, and American Airlines director and retired McKinsey & Company managing director, turned himself in to the Federal Bureau of Investigation (FBI) on Wednesday morning, according to news sources.
Gupta, a once respected corporate director, and his long-time colleague Raj Rajaratnam of Galleon Group, a hedge fund billionaire, were charged in a federal crackdown on insider trading that resulted in an 11-year prison sentence for co-conspirator Rajaratnam. Gupta was awaiting an arraignment on one count of conspiracy to commit securities fraud and five counts of securities fraud. The charges carry a potential penalty of 105 years in prison, Businessweek reports.
In a release, US attorney Preet Bharara claims that Gupta was not the most ethical leader. The prominent billionaire broke the trust of some of the nation's top public companies and ‘became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr Gupta's breach of duty.’
According to reports, Gupta’s lawyers say the allegations are ‘totally baseless.’
In March Gupta was accused of leaking information to Rajaratnam about a range of matters, including Goldman’s results, a Proctor & Gamble earnings report, and Berkshire Hathaway’s billion-dollar investment in Goldman. The Galleon case has since led to a string of criminal charges against dozens of other insider trading culprits; and Goldman’s CEO, Lloyd Blankfein, is reportedly going to testify as a prosecution witness. He will bring to light what Gupta learned as a member of the Goldman board.
