US probes role of Goldman Sachs’ Rajat Gupta in Galleon
Prosecutors are examining whether Goldman Sachs Group director Rajat Gupta gave inside information about the bank to Galleon Group hedge fund founder Raj Rajaratnam, the Wall Street Journal reported on Thursday, citing people close to the situation.business Updated: Apr 16, 2010 21:50 IST
Prosecutors are examining whether Goldman Sachs Group director Rajat Gupta gave inside information about the bank to Galleon Group hedge fund founder Raj Rajaratnam, the Wall Street Journal reported on Thursday, citing people close to the situation.
“Gupta is unaware of any examination of any such issue and has done nothing wrong,” a spokeswoman for Gupta said in a statement responding to the report.
Rajaratnam has pleaded not guilty to criminal insider trading charges. He faces a related civil lawsuit by the US Securities and Exchange Commission.
In a March 22 letter made public last week, the government said it was examining trades by Rajaratnam and others in shares of several companies, as part of a wide-ranging insider trading probe. Among these companies was Goldman, where trades between June 2008 and October 2008 were being examined. The bank’s shares traded between $74 and $187 over that time.
Citing the people close to the situation, the Journal said the government was examining whether Gupta had shared inside information about Goldman, and whether he had given it to Rajaratnam during the height of the financial crisis.
Spokesmen for Goldman and Rajaratnam declined to comment.
Goldman said last month that Gupta was not standing for re-election to its board.
It characterised Gupta, who used to run consultancy McKinsey & Co, as a close associate of Rajaratnam.
This is not the first time that someone who worked for McKinsey has surfaced in the Galleon investigation.
In January, former McKinsey director Anil Kumar — charged by prosecutors with providing Rajaratnam with confidential information about several public companies with which McKinsey was working -- pleaded guilty to securities fraud.
Prosecutors charged that over a five-year period, Rajaratnam paid Kumar up to $2 million for the stock tips. The Journal previously had reported that Kumar had a close relationship with Gupta.