Rajat Gupta: Wall Street's good man who gave too much
Wall Street star Rajat Gupta built a reputation for his good works but a free tip to a friend was his undoing and earned him a jail sentence
Rajat Gupta, the former Goldman Sachs Group director and McKinsey & Co managing director, was once a star on Wall Street known for his charity work.
Gupta, who ran McKinsey from 1994 to 2003, was sentenced on Wednesday by US District Judge Jed Rakoff in Manhattan for leaking stock tips to Galleon Group co-founder Raj Rajaratnam. Gupta, 63, was convicted by a jury in June of one count of conspiracy and three counts of securities fraud.
While Gupta did not personally profit, his tips allowed Rajaratnam to earn millions of dollars, said assistant US attorney Richard Tarlowe.
"The crime is so serious because of the position that was held, and that is why the fall from grace is more steep," Tarlowe said. "It is very important that the message be clear to that community, to that target audience, that this is insider trading.
"If you are a senior executive, if you tip another professional, another prominent businessperson, a hedge fund manager, even if you do it using your regular phone from your executive suite, that is insider trading and that will be punished severely."