Rajat Gupta (Charges Against)
Rajat Gupta was the managing director (chief executive) of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States. He was arrested in late 2011 by the FBI on insider trading charges stemming from the Raj Rajaratnam Galleon Group case and is on criminal trial. The charges against Gupta are as follows, as per prosecution:
- In 2007 Gupta called into a meeting of the Goldman Sachs board audit committee from Galleon’s offices. Minutes after the phone call ended, Gupta told Rajaratnam about Goldman’s first quarter 2007 earnings. Galleon’s records show it traded on the information, which was not made public until the next day.
- At the height of the financial crisis on September 23, 2008, Gupta called Rajaratnam 16 seconds after a special Goldman board conference call that approved a $5 billion investment by Warren Buffet’s Berkshire Hathaway. At 3:58 p.m., just two minutes before the stock market closed, Galleon traded on the information, which was not made public until after the 4 p.m. market close.
- Gupta had confidential information on October 23, 2008, that Goldman was going to report its first quarterly loss ever as a public company, and he told Rajaratnam.
- Gupta gave Rajaratnam non-public information about Procter & Gamble. This included the sale of P&G’s Folgers coffee unit to J.M. Smucker Co (SJM.N) for $3 billion before the June 4, 2008, public announcement and quarterly earnings in January 2009