The government is continuing to crack the whip on Wall Street white collar crime. On Wednesday, Rajat K. Gupta, a former Goldman Sachs director, was charged with insider trading. The 62-year-old is accused of leaking corporate secrets to disgraced hedge fund manager Raj Rajaratnam, the Galleon Group co-founder who was sentenced to 11 years in prison this month. Gupta turned himself into the FBI.
Over the past two years, 56 Wall Street traders, analysts and other financial or technology executives have been charged with insider trading, according to the New York Times. Of those 51 pleaded guilty or have been convicted.
But Gupta now has the notorious claim to fame of being the first top executive from one of Wall Street's top firms to be charged.
A federal grand jury in Manhattan charged him with one count of conspiracy to commit securities fraud and five counts of securities fraud, all related to tips on Goldman Sachs in 2008.
From the New York Times:
"Rajat Gupta was entrusted by some of the premier institutions of American business to sit inside their boardrooms, among their executives and directors, and receive their confidential information so that he could give advice and counsel for the benefit of their shareholders," Preet Bharara, the United States attorney in Manhattan, said in a statement. "As alleged, he broke that trust and instead became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr. Gupta's breach of duty."
Still, for some the real story is that the FBI allowed Gupta to turn himself in. As a result, he was saved the humiliation suffered by Rajaratnam or former IMF chief Dominique Strauss-Kahn, of a 'perp' walk.
Some analysts believe the reason why Gupta was saved from this humiliation is because he is now a cooperating witness who will reveal to authorities the inner workings of the Board of Directors at Goldman Sachs. And potentially other Wall Street halls of power. Now that's food for thought.
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio