“Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless,” his lawyer, Gary Naftalis, said in an e-mailed statement after the charges were reported. “He did not trade in any securities, did not tip Mr. Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo.”
Anne Granfield, a spokeswoman for Gupta, declined to comment. Jim Margolin, an FBI spokesman, didn’t immediately return a call seeking comment. Ellen Davis, a spokeswoman Bharara, declined to comment.
Rajaratnam, the central figure in a nationwide crackdown on insider trading at U.S. hedge funds, was convicted of securities fraud by a Manhattan federal jury in May and sentenced to 11 years in prison this month.
Asked to Inform
In an interview in Newsweek this month, Rajaratnam said prosecutors pushed him to plead guilty to one criminal charge and inform against Gupta. Rajaratnam understood that he would be sentenced to as little as five years in prison, the Newsweek article said.
At Rajaratnam’s trial, Goldman Sachs Chief Executive Officer Lloyd Blankfein testified that Gupta violated the New York-based bank’s policies by allegedly telling the defendant about the company’s results and plans.
The U.S. Securities and Exchange Commission in March started an administrative action contending Gupta passed inside information to Rajaratnam about Goldman Sachs and Cincinnati- based Procter & Gamble Co. That action was dropped in August after Gupta, who denied the allegations, sued the SEC for violating his rights by not bringing its case in district court.
In the administrative proceeding, the SEC had claimed Gupta tipped Rajaratnam, 54, about Berkshire Hathaway Inc.’s $5 billion investment in New York-based Goldman Sachs. The agency also said Gupta told Rajaratnam about quarterly earnings of Goldman Sachs and Cincinnati-based P&G, the world’s largest consumer products company.
Gupta left the Goldman Sachs board in 2010 and stepped down from P&G’s board in March.
Aside from serving on those two boards, Gupta from 1994 to 2003 ran McKinsey & Co., the global consulting firm. He remained a senior partner there until 2007.
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