Rajat Gupta Freed on $10 Mil. Bail
Rajat Gupta was released Wednesday afternoon on $10m bail after pleading not guilty to six charges of insider trading after surrendering to authorities earlier in the day. Gupta was charged with one count of conspiracy to commit securities fraud and and five counts of securities fraud.
The charges are based on tips on confidential information about Goldman Sachs and Procter & Gamble that Gupta, while sitting on their boards, allegedly provided Raj Rajaratnam between 2008 and 2009. If convicted on all counts Gupta would face up to 105 years in prison. Rajaratnam was sentenced to 11 years in prison earlier this month on insider trading charges.
“The conduct alleged is not an inadvertent slip of the tongue by Mr Gupta,” said FBI assistant director-in-charge Janice Fedarcyk. “His eagerness to pass along inside information to Rajaratnam is nowhere more starkly evident than in the two instances where a total of 39 seconds elapsed between his learning of crucial Goldman Sachs information and lavishing it on his good friend.”
The charges were unsealed Wednesday morning in the federal district court in Manhattan. The case against Gupta follows a long string of cases filed based on an FBI crusade launched in 2007 against hedge fund improprieties. The SEC also filed civil insider trading charges against Gupta Wednesday.
The case against Gupta expands on civil fraud charges originally brought in March by the SEC for passing along privileged financial information used for profit by Rajaratnam, the billionaire hedge fund manager who was the focus of the probe.
Gupta “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,” said a statement released Wednesday by US Attorney for Manhattan Preet Bharara.
“Today we allege that the corruption we have seen in the trading cubicles, investment firms, law firms, expert consulting firms, medical labs, and corporate suites also insinuated itself into the boardrooms of elite companies,” the statement added.
Until being hit with these allegations of fraud desi Rajat Gupta had been regarded as one of the most prominent Indian Americans in the corporate world.