Federal prosecutors say they merely scratched the surface last spring with their insider-trading allegations against former McKinsey & Co. Partner and Goldman Sachs Director Rajat Gupta.
Last March, the Securities and Exchange Commission (SEC) brought civil charges against Gupta for allegedly leaking inside information to convicted inside trader Raj Rajaratnam, the former Galleon group founder who is now serving an 11-year prison term. Gupta surrendered to the Federal Bureau of Investigation in October 2011 and was released on $10 million bail. He faces separate criminal charges related to the alleged insider-trading scandal, with a trial scheduled for April.
But yesterday, prosecutors filed a new indictment in Manhattan federal court that says Gupta’s illegal activity lasted longer and involved more illegal trades than the government had previously thought.
The new charges against Gupta claim he gave four illegal tips to Rajaratnam, which is double the amount that was alleged in the original indictment. The new charges could increase Gupta’s jail time if he is convicted. Prosecutors also say the scheme began in 2007 rather than 2008, as they originally alleged. Gupta is charged with five counts of securities fraud and one count of conspiracy.
In a statement, one of Gupta’s lawyers said the new charges are “totally baseless.”
Read the Thomson Reuters and Wall Street Journal for more about the new charges against Gupta.
