Rajat Gupta, a former board member of Goldman Sachs and Procter & Gamble, surrendered today to face a six-count securities fraud indictment, MSNBC is reporting. He’s the latest defendant in the biggest insider trading case in history.
The charges against Gupta were unsealed in Manhattan U.S. District Court. He’s accused of cheating the markets with Raj Rajaratnam, the convicted hedge fund founder who’s the main target of the investigation.
Gupta is awaiting an arraignment on one count of conspiracy to commit securities fraud and five counts of securities fraud. If convicted of the crimes, the Westport, Connecticut resident can face 105 years in prison.
The charges come after the Securities and Exchange Commissioner (SEC) brought civil fraud charges against Gupta in March. Gupta allegedly passed along privileged financial information that helped Rajaratnam at the height of the financial crisis.
Gupta’s lawyer released a statement, saying “the government’s allegations are totally baseless. The facts in this case demonstrate that Mr. Gupta is innocent of any of these charges…He did not trade in any securities.”
However, U.S. Attorney Preet bharara said that Grupta broke the trust of some of America’s top companies. He “became the illegal eyes and ears in the boardroom for his friend and business associate, (Raj) Rajaratnam.”
The indictment against Grupta also said he shared confidential information about Goldman Sachs and Proctor & Gamble from 2008 to January 2009, knowing Rajaratnam would use the information to sell stock ahead of public announcements. The SEC also brought civil insider trading charges against Grupta today.
Written by: Karen Benardello
