Prosecutors Sought Delay In Gupta SEC Case

Jul 7 2011 | 10:26am ET

The indefinite delay in the Securities and Exchange Commission's case against Rajat Gupta may not be good news for the former McKinsey & Co. chief, after all.

The regulator agreed to put its civil case against the alleged Raj Rajaratnam tipster on hold after prosecutors sought a delay. The Justice Department on June 15 moved "to intervene and stay the administrative proceedings," Reuters reports, winning an administrative law judge's assent to the postponement five days later.

Justice's court filings do not indicate why prosecutors sought the stay, but it could indicate that they are building a criminal case against Gupta, accused of passing confidential information about Goldman Sachs to the Galleon Group chief, who was convicted of insider-trading in May. Gupta sat on the bank's board of directors.

Gupta has not been charged with any criminal wrongdoing, although prosecutors have identified him as an unindicted co-conspirator in the Galleon case. Gupta has denied any wrongdoing.

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