Ex-Goldman director Gupta found guilty of insider trading

Stephen Foley

Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.

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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.

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