Prosecutors Suggest Gupta Secretly Worked For Galleon

Jun 1 2012 | 1:29pm ET

A witness at the insider-trading trial of Rajat Gupta says the former McKinsey & Co. chief secretly served as an executive at convicted fraudster Raj Rajaratnam’s Galleon Group.

Ayad Alhadi, a marketer at Galleon from 2008-2009, testified at Gupta’s federal court trial in Manhattan on Friday that he was called into Rajaratnam's offices a few days before a 2008 fundraising trip to the Middle East and told that Gupta was the new chairman of Galleon International.

Asked how he responded to the announcement, Alhadi said, “I think I congratulated him,” reports the New York Daily News.

Alhadi said he traveled with Gupta to the Middle East where they met with potential investors—including Abu Dhabi Investment Authority, the Abu Dhabi Pension Fund, First Gulf Bank and the Abu Dhabi Investment Council—some of which were very impressed by Gupta and his ties to Goldman.

In fact, days after meeting with Gupta, the ADIC promised to invest $75 million with Galleon. Asked if an investment of that size after four days was common Alhadi told the court it was “pretty uncommon.”

Gupta, who sat on the boards of both Goldman and Procter & Gamble, is accused of leaking market-making information about both companies to Rajaratnam. He has pleaded not guilty.

 


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...