Rajat Gupta, a former board member at Goldman Sachs, has been convicted of illegally sharing bank secrets with a hedge fund friend, in a victory for prosecutors of insider dealing on Wall Street.
He was found guilty on three counts of securities fraud and one of conspiracy, after a trial lasting almost four weeks. A jury found him not guilty on two further counts.
The business grandee was brought down by his association with Raj Rajaratnam, founder of the Galleon Group of hedge funds, who is currently serving an 11-year prison sentence for insider trading. Gupta repeatedly called Rajaratnam after Goldman board meetings to share details about forthcoming announcements, including an investment by Warren Buffett at the height of the credit crisis and a disappointing quarterly results statement.
Gupta's defence team argued he had never shared non-public information and never profited from any inappropriate share trading.
His arrest last year was an extraordinary reversal for a man with impeccable business credentials.
Now 63, he rose to lead the consulting powerhouse McKinsey as managing director, and in retirement joined the boards of Goldman and Procter & Gamble, among others.
The jury was played wiretap evidence in which Rajaratnam was heard boasting about his inside tips on Goldman.
Gupta will be sentenced on 18 October.Reuse content