Stephen Bornstein writes: Of all the Wall Street players U.S. attorney
Preet Bahara has nabbed for insider trading in the last four years, Rajat Gupta
has got to be the most improbable.
He’s not a hedge fund operator, investment banker, equity
trader, research analyst or expert network consultant. Instead, Raj Gupta has
for years been a distinguished member of America’s business and philanthropic
elite, a native of India who rose from orphanhood to the top of McKinsey &
Co. and then onto the boards of Goldman Sachs, Procter & Gamble, American
Airlines, the Rockefeller Foundation and the Bill & Melinda Gates
Foundation. He and his wife Anita attended President Obama’s first state
dinner.
Gupta’s two-year sentence, handed down last week, was well
below the 20-year maximum term the 63 year-old was facing. He was convicted of
securities fraud for tipping Galleon hedge fund manager Raj Rajaratnam to
Warren Buffet’s $5 billion investment in Goldman at the height of the financial
crisis and Goldman’s first quarterly loss as a public company. Gupta was also
fined $5 million, while Rajaratnam is now serving an 11-year sentence for
trading on those two insider tips and lots of other material, non-public
information obtained from illegal sources.
The insider trading case against Rajat Gupta was completely
circumstantial, although the indirect evidence was “overwhelming” according to
Judge Rakoff……
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