Former Goldman Sachs director Rajat Gupta, one of the most prominent Indian-Americans in the country's financial scene, today surrendered before federal authorities in New York in connection with a massive insider trading scam.
62-year-old Gupta appeared in Manhattan federal court but it was not immediately known what charges have been slapped against him by the prosecutors. Gupta was the former director of Goldman Sachs and Procter & Gamble and head of McKinsey & Company. He came under the scanner after prosecutors charged his Sri Lanka born hedge fund billionaire friend Raj Rajaratnam on insider trading charges.
Rajaratnam had been sentenced earlier this month to 11 years in prison. Securities laws prohibit company insiders from divulging corporate secrets to those who then profit from them. A native of Kolkata, Gupta had a meteoric rise to corporate success after he graduated from Harvard Business School. He advised business leaders including General Electric's Jeffrey Immelt and Henry Kravis of the private equity firm Kohlberg Kravis Roberts & Company.
He had also served as special adviser to the United Nations. Gupta's name emerged in the insider trading scheme a week before Rajaratnam's trial in March, when the Securities and Exchange Commission filed an administrative proceeding against him accusing him of passing confidential information about Goldman Sachs and Procter & Gamble to Rajaratnam, who then traded on the information and profited from it.