Posted on 03/01/2011 10:02:58 AM PST by Darren McCarty
The U.S. Securities and Exchange Commission has slapped insider trading charges against Rajat K. Gupta, tying the former Goldman Sachs director to the insider trading at former Forbes 400 member Raj Rajaratnam’s hedge fund Galleon Group.
Regulators allege that Gupta, a former board member of Goldman, provided Rajaratnam with information about the bank’s financial results for the second and fourth quarters of 2008 before they were made public. Gupta is also said to have tipped off the hedge fund manager to the $5 billion investment in Goldman made by Warren Buffett’s Berkshire Hathaway before the deal was announced September 23, 2008. The information generated illicit profits and loss avoidance of over $17 million, the SEC claims. Gupta is also said to have improperly shared information about the December 2008 quarter at Procter & Gamble, where he was also a director, which generated $570,000 in illicit gains.
Gupta was an investor and director of Galleon’s GB Voyager Multi-Strategy Fund SPC, which invested in a number of Galleon hedge funds, some tied to the insider trading scheme, and had other business dealings with the Rajaratnam, according to the SEC charges.
(Excerpt) Read more at blogs.forbes.com ...
The dirt found in this country is beyond any in another democracy.
Gupta was also recently appointed as UN Secretary-General Kofi Annan’s special advisor on management reform.
On July 1, 2010, he became Chairman of the International Chamber of Commerce. He was appointed as an independent director at Goldman Sachs on November 10, 2006.
He is also on the board of trustees of the University of Chicago, advised McKinsey’s work with the Bill & Melinda Gates Foundation on AIDS, as well as their Global Health Initiative, and is currently a trustee on the board of the Rockefeller Foundation.
Rajat K. Gupta contributions to nonprofits:
William J. Clinton Foundation - $10,001 to $25,000
Gupta, Rajat Kumar
Stamford, CT 06901
McKinsey & Co./Management Consultan
DEMOCRATIC CONGRESSIONAL CAMPAIGN COMMITTEE (D) $10,000
primary 11/07/08
Gupta, Rajat K
Westport, CT 06880
Mckinsey & Company/Consultant OBAMA, BARACK (D)
President
OBAMA VICTORY FUND $2,500
primary 08/26/08
http://www.newsmeat.com/fec/bystate_detail.php?st=CT&last=Gupta&first=Rajat
In total, Rajaratnam’s firm made almost $15 million in profits off Gupta’s tips, according to the SEC.
The regulatory body said Rajaratnam first profited off information from Gupta when he was told minutes before market close on Sept. 23, 2008, that Goldman was receiving a $5 billion investment from Berkshire Hathaway. The next day, when news of the Berkshire investment was made public, Rajaratnam’s hedge fund, Westport, Conn.-based Galleon Group, dumped its shares, earning it a profit of about $900,000, according to the SEC.
The SEC said Galleon profited a second time using information from Gupta. On June 10, Gupta was on a phone call with Goldman CEO Lloyd Blankfein about second quarter financial results for 2008. Immediately afterward there
there was a “flurry of calls” between Gupta and Rajaratnam, said the SEC. The following day Galleon put call options on about 3,500 Goldman shares. When the financial results were publicly reported June 17, Galleon made $13.6 million, according to the SEC.
The SEC went on to cite two more instances where Galleon used inside information by Gupta to trade shares of companies that Gupta was connected to. Galleon allegedly made $570,000 in profits and avoided losing $3 million from the tips.
Gupta’s role with the Gates Foundation is not mentioned in the SEC documents, but multiple bios for him on the web show overlapping experience, including roles with global consulting firm McKinsey & Co. and the Global Fund to fight AIDS, Tuberculosis and Malaria.
Gupta is listed as chairman of the three-member Global Development Advisory Panel at the Gates Foundation. The panel “plays an important role in strengthening our work by offering independent assessments of our strategies and helping us evaluate results,” according to the Gates Foundation’s website.
http://www.bizjournals.com/seattle/news/2011/03/01/gates-foundation-advisory-panel-chair.html
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