Rajat K Gupta, the retired head of the consulting firm McKinsey & Company and a former Goldman Sachs board member, was found guilty on today of conspiracy and securities fraud. He is the most prominent business executive convicted in a wave of prosecutions that followed the government’s sweeping investigation into insider trading on Wall Street.
After a monthlong trial, a jury of eight women and four men took only two days to deliberate before reaching a verdict. The jury found Mr Gupta guilty of leaking confidential information about Goldman to his former friend and business associate, the fallen hedge fund titan Raj Rajaratnam, on three different occasions in 2008. He was also convicted of conspiring in an insider trading scheme with Mr Rajaratnam.
Mr. Gupta was found not guilty of two instances of tipping Mr Rajaratnam, including an allegation that he divulged secret news about Procter & Gamble, where he also served on the board.
Gupta, who was orphaned as a teenager, earned an engineering degree in India. He then moved to the US after receiving a scholarship to Harvard Business School. Gupta then landed a job at McKinsey, the elite management-consulting firm. In 1994, at the age of 45, Gupta was elected the global head of McKinsey.
Gupta faces a maximum sentence of 25 years in prison, but will probably serve less time than that. Rajaratnam, the former head of the Galleon Group hedge fund who was convicted of orchestrating a huge insider trading conspiracy last year, is serving an 11-year jail term.