Ex-McKinsey Chief May Have Been Rajaratnam Goldman Source

Apr 15 2010 | 1:48pm ET

The former head of McKinsey & Co. may have passed inside information about Goldman Sachs—where he sits on the board of directors—to Galleon Group founded Raj Rajaratnam.

The potential Goldman link to the sprawling insider-trading case comes just weeks after prosecutors told Rajaratnam’s defense team that it was now looking into Galleon’s trading of Goldman shares in 2008. According to The Wall Street Journal, Rajaratnam’s source at Goldman was Rajat Gupta, a longtime friend and associate of Rajaratnam’s who headed McKinsey from 1994 until 2003.

Gupta has not been charged in the case, and his own trading is not believed to be part of the investigation. In their letter last month, prosecutors did say the ongoing investigation was likely to include “identification of additional uncharged co-conspirators.”

Four years ago, Rajaratnam, Gupta and former Goldman executive Mark Schwartz founded a South Asia alternative investments firm, Taj Capital. While Rajaratnam has since cut ties with that firm, now called New Silk Route, managing $1.4 billion in private equity funds, Gupta remains its chairman.

According to the Journal, the two men spoke frequently. Gupta was also a frequent invitee to parties hosted by Galleon.

In addition to being the first possible Goldman tie to the Galleon case, Gupta is also the second McKinsey link. Former consultant Anil Kumar in January pleaded guilty and is cooperating with investigators. He claims Rajaratnam paid him millions for confidential information about Advanced Micro Devices.

Rajaratnam and his co-defendant, former New Castle Partners executive Danielle Chiesi, are set to go on trial in October. A total of 21 people have been charged in the case; 11 have pleaded guilty.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.