Ex-Goldman Sachs Exec Surrenders to FBI
- Posted on October 26, 2011 at 10:14am by
Becket Adams
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A former Goldman Sachs board member has surrendered to federal authorities to face criminal charges stemming from a massive hedge fund insider trading case.
Rajat Gupta appeared in Manhattan federal court but the charges were not immediately disclosed.
The Securities and Exchange Commissioner (SEC) originally brought civil fraud charges against Gupta in March. The longtime McKinsey & Company chief is accused of providing insider information to Galleon Group founder Raj Rajaratnam, according to the Wall Street Journal.
Some may remember that Raj Rajaratnam was sentenced recently to 11 years in prison for insider trading.
Galleon hedge fund founder Raj Rajaratnam. The former billionaire Wall Street hedge fund manager has been convicted of 14 federal charges alleging he made a fortune off insider trades. (Photo: AP)
Gupta’s lawyer responded by accusing the SEC of launching a “flawed case premised in large part on unreliable evidence being used in an attempt to bring down a man of sterling reputation and remarkable achievements without the procedural safeguards historically accorded to all persons similarly charged.”
The Indian-born, Harvard-educated Gupta also has served on the boards of Procter & Gamble and the parent company for American Airlines. He was also a guest at President Barack Obama’s first state dinner.
Gupta’s name may also sound familiar to Blaze readers because he played prominently at the criminal trial earlier this year of aforementioned Rajaratnam.
Prosecutors produced phone records showing Gupta called Rajaratnam 23 seconds after a Goldman Sachs meeting where it was announced that they were going to post a loss, causing Rajaratnam to sell his entire position in Goldman the next morning and save millions of dollars.
Rajaratnam also earned close to $1 million when Gupta told him that Goldman had received an offer from Warren Buffett’s Berkshire Hathaway to invest $5 billion in the banking giant, prosecutors said.
In one tape played at trial, Rajaratnam could be heard grilling Gupta about whether the Goldman Sachs board had discussed acquiring a commercial bank or an insurance company.
“Have you heard anything along that line?” Rajaratnam asked Gupta.
“Yeah,” Gupta responded. “This was a big discussion at the board meeting.”
Prosecutors sought to maximize the impact of the Gupta tape by calling Goldman Sachs chairman Lloyd Blankfein to testify that the phone call violated the investment bank’s confidentiality policies.
Gupta’s lawyer Gary P. Naftalis said Tuesday night that his client and Rajaratnam communicated for “legitimate reasons.” He said his client didn’t trade in any securities, didn‘t tip Rajaratnam so he could trade and didn’t share in any profits.
“The facts demonstrate that Mr. Gupta is an innocent man and that he has always acted with honesty and integrity,” Naftalis said in an emailed statement.
(H/T Newser)
The Associated Press contributed to this story.
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dssgateway
Posted on October 26, 2011 at 10:07pmi didn’t have time to read all the terms of use upon signing up, but do you have to be a tea ****** to comment here? from the posts here, it reminds me of the corrupt politicians in congress all sitting around on their hands namecalling the other party instead of doing what they are paid to do. that‘s the biggest reason nothing’s getting done. no president can get anything done while congress is acting like babies. i hope these idiot teabaggers will not let another 4 years go by while they are crying about losing again in 2012.
Report Post »SCSAVINGFREEDOM
Posted on October 26, 2011 at 7:50pmB. Hussien O’B will probably pardon him in the next few days, or who knows, he may have amnesty, doesn’t mention whether or not he is a citizen…….another one will probably walk away!!!!
Report Post »SCSAVINGFREEDOM
Posted on October 26, 2011 at 7:45pmI‘m sure they’ll get to that in the next day or two!!!
Report Post »paintbrushbright
Posted on October 26, 2011 at 4:38pmMaybe this guy will turn states evidence on politicians who were greased with the inside trades. I hope Barney and Dodd were on the list. I will like to see the list of crooks that Obama pardons before his upcoming defeat.
Report Post »legendarytwo
Posted on October 26, 2011 at 6:05pmInside trading is not illegal for congress. Imagine that!
Report Post »Lantern
Posted on October 26, 2011 at 1:23pmWhy isn’t the FBI involved in Solyndra and First Solar?
Report Post »D Money
Posted on October 26, 2011 at 1:18pmSomeone needs to produce a video showing the pictures of all the ‘Wall Street Fat Cats’ that are closely related to Obama, maybe titling it, “100% of this 1% Club are Friends and Supporters of Barack Obama”.
Report Post »zenjak
Posted on October 26, 2011 at 12:58pmArrested? Looks like someone must have been late on his slush fund payoffs to The Obama.
Report Post »Gonzo
Posted on October 26, 2011 at 12:55pm“He was also a guest at President Barack Obama’s first state dinner.“ I thought Barry hated those ”fat cats”.
Report Post »Shenandoahvalleypatriot
Posted on October 26, 2011 at 12:53pmFunny I thought all of the Wall Street Bankers were Jews? I guess this will really confuse the OWS crowd.
Report Post »Bullfrog85
Posted on October 26, 2011 at 12:26pmIs he still considered part of the 1%?
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