Fact Box: Rajat Gupta
Rajat Gupta has been ordered to pay $6.2 million for legal expenses incurred by his former employer Goldman Sachs during his trial.
Rajat Gupta (64) is India-born former Goldman Sachs director who was sentenced to two year last year for insider trading.
In US, the banks by laws are required to pay the legal fees of their top Officers and Directors. Before, his trial, Mr. Rajat Gupta entered into a deal with Goldman Sachs that if Rajat Gupta is found guilty for insider trading, he will reimburse entire amount that the Goldman Sachs pays for legal fees incurred.
Who is Rajat Gupta and what is the case?
- Rajat Kumar Gupta, is an Indian American Businessman. He was global head of McKinsey & Company, the management consulting firm from 1994 to 2003 and a business leader in India and the United States.
- After his rise in McKinsey, he was known as the “First India-born CEO of a global corporation”.
- Gupta also chaired as corporate chairman, board director or strategic advisor to a variety of large and notable organizations including Goldman Sachs, Procter and Gamble and American Airlines, and non-profits including The Gates Foundation, The Global Fund and the International Chamber of Commerce.
In 2007 when Gupta was Director of Goldman Sachs, he provided confidential information about the company’s investment plan and earning details, which are considered Non-Public information, to Raj Rajaratnam. He leaked the information of $ 5 billion investment which was to be made by Berkshire Hathaway into Goldman Sachs.Rajaratnam traded on the information and made profits. It was
alleged that Gupta also had some vested interest in Rajaratnam company- Galleon and he also got some benefits through that trading which is considered as Insider Trading- a corporate crime. It was also alleged that Gupta passed on non- public information about Procter & Gamble to Rajaratnam where he leaked info about company’s sale of its assets worth $ 3 billion and about its quarterly earnings which were not made public.