Friday, June 15, 2012
A jury convicted Rajat Gupta of three counts of securities fraud and one count of conspiracy for passing along confidential board information to Galleon hedge fund operator Raj Rajaratnam. He was acquitted of two other counts.
This is a big victory for the government. First, Gupta is a big fish -- a former director of Goldman Sachs and Procter & Gamble and executive at McKinsey & Co. Second, unlike in Rajaratnam's trial, the government had no wiretaps of stock tips but instead relied on circumstantial evidence, principally phone records of Gupta calling Rajaratnam after receiving confidential board information.