Monday, 28 July 2014
Last updated 2 days ago
Jul 11 2011 | 11:06am ET
A top McKinsey & Co. executive said it could take decades to undo the damage done to the consulting giant by the Galleon Group insider-trading scandal.
Dominic Barton, the firm's global managing director, called the case, which has seen one former partner plead guilty to tipping Galleon founder Raj Rajaratnam and the firm's former head accused of doing so, "incredibly distressing and embarrassing."
"I feel like some turpentine was thrown on the hood of the car," Barton told the Financial Times. But he said it was too soon to know how much lasting damage had been done to McKinsey's brand.
"I wish I could say it changed next week or in six months," he said. "I really think it will be in the 10 to 20 year time frame we'll know."
Barton said that McKinsey is actively working to implement changes to prevent a re-run of the Galleon mess and to boost its internal controls.
"We're looking at what people will say in McKinsey 20 years from now about how this generation responded," he told the FT.
Despite the turmoil, Barton said that clients have been supportive of the firm and that the scandal "hasn't affected our work at all."
Anil Kumar, a former partner at McKinsey, pleaded guilty to passing confidential information to Rajaratnam. He repeated those accusations on that stand during Rajaratnam's trial, helping convict his former business school friend. Meanwhile, the Securities and Exchange Commission's lawsuit against former McKinsey chief and Rajaratnam business partner Rajat Gupta has been postponed as prosecutors look further into Gupta. Gupta is accused of passing information about Goldman Sachs, on whose board he served, to Rajaratnam.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…