Insider trading: Rajat Gupta convicted, faces jail term of up to 25 yrs
Rajat Gupta, a consummate business insider who once sat on the board of Goldman Sachs Group Inc, was convicted on Friday of leaking secrets about the investment bank at the height of the financial crisis, a major victory for prosecutors seeking to root out illicit trading on Wall Street.
A Manhattan federal court jury delivered the verdict on its second day of deliberations, finding Gupta fed stock tips to his hedge fund manager friend Raj Rajaratnam gleaned from confidential Goldman board meetings. He was found guilty of four of six criminal counts and could face a prison term of up to 25 years.
The conviction burnishes the record of the U.S. Attorney's Office in Manhattan, which has spent the last several years aggressively prosecuting insider trading. More than 60 people have pleaded guilty or been convicted in cases brought by the FBI and the Manhattan U.S. Attorney in the past four years.
In its case against Gupta, who headed elite business consultancy McKinsey & Co for nine years and is the most prominent person charged in the insider-trading crackdown, the government faced a challenge. There was no evidence he traded on any of the information he allegedly leaked and the government did not have the trove of FBI wiretaps that helped win a conviction of Rajaratnam a year ago.
Jury foreman Rick Lepkowski told reporters after the verdict: On the counts we convicted, we felt there was enough circumstantial evidence. He said wiretaps in which Rajaratnam was heard telling two of his
