Friday, 24 March 2017
Last updated 13 min ago
Dec 9 2011 | 10:02am ET
The Goldman Sachs investor suing former McKinsey & Co. chief Rajat Gupta for his alleged passing of confidential information to hedge fund manager Raj Rajaratnam is fighting Gupta's effort to have the case dismissed.
Gupta, who is also facing criminal charges and a Securities and Exchange Commission lawsuit stemming from the Galleon Group scandal, argued that James Mercer's suit should be junked because Gupta did not benefit financially from Rajaratnam's trades. But Mercer contends that, as a Goldman Sachs shareholder, Gupta did profit
"Gupta did not provide confidential information about the Goldman Sachs Group Inc. to Raj Rajaratnam without purpose," Mercer's filing yesterday alleged. "He did it for pecuniary gain."
According to Mercer, the SEC and prosecutors, Gupta, who served on Goldman's board, alerted Rajaratnam to an impending investment by Berkshire Hathaway in the bank. He also allegedly gave Rajarantnam advance notice about a surprise loss posted by the bank.
Goldman CEO Lloyd Blankfein testified at Rajaratnam's trial that the information passed by Gupta was confidential and that Gupta had violated Goldman's policies. Rajaratnam was convicted and sentenced to 11 years in prison.