Rajat Gupta’s rise from a teenage orphan to a member of the highest echelons of corporate America seemed like a fairy tale, even to some of the jurors who, on June 15, found Gupta guilty of insider trading. The jury foreman told Reuters that Gupta had led a “storybook life” and that he wanted to believe the allegations against him weren’t true.
Gupta once headed the global management consulting firm McKinsey & Co. and served as a director on the boards of companies including Goldman Sachs Group Inc. and Procter & Gamble. He was a devoted father, husband and philanthropist. No matter how well-respected and sympathetic a figure he was, in the end a federal jury in the Southern District of New York (SDNY) found Gupta guilty of one count of conspiracy and three counts of securities fraud for passing confidential Goldman Sachs financial information to Galleon Group hedge fund co-founder Raj Rajaratnam. The jury found Gupta not guilty on two counts of securities fraud, including the sole charge related to passing Procter & Gamble inside information to Rajaratnam.
Gupta’s sentencing is set for Oct. 16. He faces up to 16 years in prison but likely will receive a far lesser sentence in light of the 11-year sentence of Rajaratnam, who made millions off trades connected to the insider-trading scheme. Rajaratnam was found guilty on 14 counts and faced up to 25 years.