Thursday, 30 October 2014
Last updated 1 hour ago
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.
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