The Securities and Exchange Commission (SEC) on Thursday dropped its administrative case against Rajat Gupta, the Mckinsey executive who founded the Indian School of Business, in connection with the Galleon insider trading scandal.
But the commission kept open the door for filing a case later, in a federal court, if necessary. Gupta was charged with tipping Galleon founder Raj Rajaratnam about crucial deals that enable him to make millions.
Rajaratnam was found guilty of insider trading in May and is awaiting sentencing.
“Gupta is very pleased that as a result of his lawsuit the SEC has dismissed its administrative proceeding, and he will no longer be singled out for disparate treatment” said his lawyer, Gary Naftalis.
Gupta had filed a lawsuit against the SEC for the charges filed against him.
The SEC cited the suit in its ruling on Thursday.
But if the commission were to re-file the case, Nastalis said, “It must do so in federal court, where he will have a right to a jury trial, the right to depose witnesses, the protection of the federal rules of evidence – procedural safeguards not available in an administrative proceeding. – this time in a federal court,” said Naftalis.
Gupta had in the aftermath of the SEC case, resigned from the boards of many companies. Is he likely to be invited to rejoin by them or at least some of them? He had even dissociated from the Hyderabad business school he had founded.