Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Saturday, March 19, 2011

Gupta Sues SEC

The SEC created a stir a few weeks ago when it brought an administrative enforcement action against Rajat Gupta, the former P&G and Goldman director, for tipping confidential inside information to Raj Rajaratnam. Many questioned why the SEC chose to exercise its new authority in Dodd-Frank to bring an administrative proceeding against Gupta and did not bring an action in federal district court and why the DOJ had not brought a criminal proceeding against Gupta.  (The prosecutor in his opening statement at Rajaratnam's trial referred to the alleged tips from Gupta to Rajaratnam, and this week  at the trial audio tapes were played of conversations between the two.)

Now Gupta has brought an action against the SEC, asserting that the SEC rushed to bring the administrative action against him and that his constitutional right to a trial by a jury has been violated.  The law also questions whether the SEC can assert the Dodd-Frank provisions to conduct that allegedly took place before enactment of the statute.

NYTimes, Ex-Goldman Director Sues S.E.C. Over Galleon Case

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