Rajat Gupta faces more insider-trading chargesFebruary 1st, 2012 - 8:30 pm ICT by IANS
New York, Feb 1 (IANS) US prosecutors have expanded their insider-trading case against Goldman Sachs Group’s former Indian American director Rajat Gupta, charging him with passing tips to convicted hedge fund manager Raj Rajaratnam much earlier than alleged before.
In a superseding indictment filed Tuesday in federal court in Manhattan, prosecutors broadened their description of the insider-trading scheme, saying it began in March 2007 not in 2008 as alleged in October.
Prosecutors said Gupta tipped Galleon Group co-founder Rajaratnam about Goldman Sachs’s first quarter 2007 earnings and, while at Galleon’s offices, listened to a Goldman Sachs board meeting where earnings were disclosed.
“During that call, the audit committee discussed the company’s quarterly earnings announcement that would be made the following day,” assistant US attorneys Reed Brodsky and Richard Tarlowe said in the indictment. “Gupta participated in the audit committee call from the premises of Galleon.”
Gupta, 63, who also led McKinsey & Co. and was a P&G; director, was accused in October of passing inside information to Rajaratnam from 2008 to January 2009.
Prosecutors Tuesday said that Gupta’s investments with Rajaratnam, which included $10 million invested in funds and an ownership stake in at least two other funds, was a motive for him to engage in the insider-trading scheme. Gupta made a commitment to invest about $22.5 million in a private-equity fund focusing on Asia, the US said.
Gupta provided the inside information to Rajaratnam “because of Gupta’s friendship and business relationships with Rajaratnam,” prosecutors said.
“Gupta benefited from Rajaratnam’s capital commitment to, and position as a limited partner of, the private equity fund.”
The government said the conspiracy continued until January 2009, beyond when Gutpa’s lawyer has said his client’s friendship with Rajaratnam deteriorated.
In a statement, Gupta’s lawyer, Gary Naftalis, called the charges “totally baseless.”
“The newly added charges-like the ones brought last year-are not based on any direct evidence, but rely on supposed circumstantial evidence,” Naftalis said.
“The facts in this case demonstrate that Gupta is innocent of all of these charges, and that he has always acted with honesty and integrity.”
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- Rajaratnam used Indian-American 'corporate spies': Prosecution - Apr 21, 2011
- Ex-Goldman Sachs director Gupta arrested, charged in insider trading case - Oct 26, 2011
- Rajat Gupta's lawyers say others tipped Rajaratnam - Jun 07, 2012
- Rajat Gupta's trial: Prosecutors play FBI wiretaps - May 25, 2012
- New insider trading probe may help Rajat Gupta - Apr 20, 2012
- Rajat Gupta had no motive to leak inside tips: Defcnce - Jun 05, 2012
- Rajat Gupta's trial set for April 9 - Oct 27, 2011
- Rajat Gupta secretly served Rajaratnam's hedge fund: Prosecution - Jun 01, 2012
- Secret tapes show Rajaratnam traded on tips from Goldman source - Mar 31, 2011
- US prosecutor says Rajat Gupta part of insider trading - Mar 05, 2011
Tags: american director, audit committee, board meeting, brodsky, business relationships, capital commitment, galleon, galleon group, gary naftalis, goldman sachs, goldman sachs group, hedge fund manager, insider trading, mckinsey, ownership stake, private equity fund, prosecutors, quarterly earnings announcement, rajat gupta, superseding indictment