Rajat Gupta, who reached the pinnacle of corporate America as managing partner of McKinsey & Co. and as a director at Goldman Sachs Group Inc. and Procter & Gamble, was convicted by a federal jury of leaking inside information to hedge-fund manager Raj Rajaratnam.
Gupta, 63, was found guilty of securities fraud and conspiracy by a federal jury in Manhattan today in its second day of deliberations. The trial began May 21. Securities fraud carries a maximum prison sentence of 20 years. Conspiracy carries a five-year maximum prison sentence. He will remain free on bail until his sentencing on Oct. 18.
The verdict is a victory for the office of Manhattan U.S. Attorney Preet Bharara and the Federal Bureau of Investigation in their assault on insider trading, which used tools normally employed against organized crime, including phone taps and informants.
Gupta is the most prominent of those convicted at trial or to plead guilty since the nationwide crackdown began in October 2009. To date, the U.S. has brought cases against 66 traders and their sources from Wall Street to Silicon Valley. No one has won an acquittal; six cases are pending.
Besides his tenure at Goldman Sachs and McKinsey, which he ran from 1994 to 2003, the Kolkata-born Gupta served on the boards of the Rockefeller Foundation and the Bill & Melinda Gates Foundation. He is also a co-founder of the Indian School of Business in Hyderabad.
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