New York – Another high-profile drama involving an Indian American hit global media headlines as a US court held one of the top ranking members of corporate America accountable for insider trading.
Rajat Gupta, a poster boy of the American corporate world, was found guilty of providing insider information to Galleon hedge fund founder and friend Raj Rajaratnam, in one of America’s biggest insider trading cases.
The court convicted Gupta on three counts of securities fraud and one count of conspiracy for passing along confidential boardroom information about Goldman and Proctor & Gamble to Rajratnam, who earned millions of dollars trading on Gupta’s tips.
Gupta was found guilty for providing information about the $5 billion investment by Warren Buffett’s Berkshire Hathaway, Inc, and of giving information to Rajaratnam on October 24, 2008 about Goldman stock.
Gupta was, however acquitted of two counts of securities fraud.
Commenting on the verdict, Ravi Batra, a New York based lawyer said, “The jury has spoken fast, and with 2 “not guilty” verdicts, made it more just.”
Gupta’s slide downhill began with his billionaire friend Raj Rajaratnam, a Sri Lankan, going to prison for 11 years after being charged by federal prosecutors for running one of the biggest insider trading scams in US history.
The US Securities and Exchange Commission (SEC) filed an administrative civil complaint against Gupta in March of last year for insider trading.
“Vigorously” denying the SEC accusations, Gupta filed a suit against the SEC saying that by bringing administrative charges against him, the regulator is denying him the right to have a jury trial.
The SEC later dropped the complaint, but filed fresh insider trading charges against Gupta as soon as the federal prosecutors formally brought charges in October.
On this course of action, Batra said, “Gupta, in a moment of near insanity, successfully sued the US government to dismiss the SEC administrative case and got a double-barrel response: criminal indictment and a civil case.”
On the next course of action, Batra predicted, “Now, after the defense motion to set aside the verdict is swiftly disposed off by the court, the sentencing stage will cause Judge Jed Rakoff, one of America’s independent best, to take stock of Gupta’s lifelong good deeds to determine a reduced just sentence.” (IATNS)