Monday, 26 January 2015
Last updated 24 min ago
Apr 17 2012 | 1:49pm ET
Prosecutors have filed a new insider-trading claim against former McKinsey & Co. chief Rajat Gupta.
The new allegation brings to five the number of confidential tips Gupta is accused of passing to Galleon Group founder Raj Rajaratnam. All dealt with Goldman Sachs and Procter & Gamble, on whose board Gupta sat.
The latest allegation is that Gupta told Rajaratnam of "P. & G.'s organic sales growth forecast for the October-to-December quarter prior to P. & G.'s public announcement on or about Dec. 11, 2008," prosecutors said in a letter made public Monday. The new claim is based on instant messages and e-mails reviewed only last week, prosecutors told U.S. District Judge Jed Rakoff, who in February warned he wouldn't allow further charges.
But prosecutors appear undeterred, writing, "the government… is waiting for outstanding requests for information from a number of third-parties," and in particular is eyeing Procter & Gamble's fourth-quarter 2007 earnings announcement.
Gupta is not accused of trading illegally himself. His lawyer has poured scorn on the case and promised a vigorous defense. He faces five counts of securities fraud and one of conspiracy; he faces decades in prison if convicted at his trial, which begins on May 21.
The "newly added charges—like the ones brought last year—are not based on any direct evidence, but rely on supposed circumstantial evidence."
Goldman CEO Lloyd Blankfein is expected to testify at Gupta's trial, which will also feature wiretapped phone calls involving Gupta. Some of those calls were heard at Rajaratnam's trial, which ended in the Galleon founder's conviction and sentencing to 11 years in prison.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…