Legal

Former Goldman Sachs Director, Ex-McKinsey Luminary To Face Insider Dealing Charges

Tom Burroughes, Group Editor, October 26, 2011

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A former Goldman Sachs director who was also a former global head of McKinsey & Co,
the consultants, was expected to surrender to US federal law
enforcement today to face criminal charges related to insider dealing, Reuters reported, citing an unnamed source.

Rajat Gupta had been named by prosecutors as an unindicted
co-conspirator in the criminal case against hedge fund tycoon Raj
Rajaratnam earlier this year. Rajaratnam, who created the Galleon Group
hedge fund, was convicted in May of insider dealing and jailed for 11
years over a week ago.

Gupta's attorney, Gary Naftalis, would not comment yesterday on
possible criminal charges, the news agency said, but he issued a
statement echoing his previous comments that Gupta committed no
wrongdoing. "Any allegation that Rajat Gupta engaged in any unlawful
conduct is totally baseless. The facts demonstrate that Mr. Gupta is an
innocent man and that he has always acted with honesty and integrity. He
did not trade in any securities, did not tip Rajaratnam so he could
trade, and did not share in any profits as part of any quid pro quo," it
said.

Gupta, 62, spent 34 years at McKinsey. He won a seat in 2006 on the
board of Goldman. He retired from McKinsey in 2007. Goldman chief
executive Lloyd Blankfein was called to the witness stand by the
US government to testify at Rajaratnam's trial in Manhattan Federal
Court. Blankfein told the jury that Gupta violated confidentiality at
Goldman Sachs by leaking boardroom secrets.

Ellen Davis, a spokeswoman for Manhattan US attorney Preet Bharara,
whose office prosecuted Rajaratnam, declined to comment on Gupta's
surrendering to authorities or any possible charges, the report said.

 

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