With Galleon Trial Underway, Tarnished McKinsey Plots Response

Mar 16 2011 | 12:44pm ET

With every day bringing out new damning reports about McKinsey & Co., the consultancy giant's leaders are struggling to deal with the firm's involvement in the Raj Rajaratnam case.

The firm's partners are to meet in Washington, D.C., this week to discuss the situation, following former partner Anil Kumar's testimony in the Rajaratnam trial that he used his position at McKinsey to pass confidential information to the Galleon Group founder. A McKinsey spokeswoman told The Wall Street Journal that the Galleon case "is not a formal part of the agenda but, as is know, our firm is monitoring the matter and taking it seriously, as you would expect."

What is more, in recent weeks, global managing director Dominic Barton has reached out to the firm's former partners describing his own feelings and McKinsey's concrete reactions to the damaging revelations.

Barton told the McKinsey alumni that he was "saddened" by the involvement of Kumar and his predecessor, Rajat Gupta in the case. Gupta, who led McKinsey for a decade, was accused earlier this month by the Securities and Exchange Commission of passing tips from the boards of directors on which he sat to Rajaratnam; he adamantly denies the charges.

Barton called the allegations against Gupta and Kumar's admissions "shocking and disappointing." One former McKinsey partner told the Journal that Barton was "obviously dismayed" after Kumar's alleged misdeeds became public; Kumar pleaded guilty to insider-trading last year.

McKinsey has since instituted "a mandatory professional standards learning program" for current staff and has launched a review of its ethics policies in the wake of Kumar's allegations.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note