Rajat Gupta Fined $13M, Barred From Financial Industry

Jul 19 2013 | 9:12am ET

Rajat Gupta, the former McKinsey & Co. chief convicted of passing inside information to Galleon Group founder Raj Rajaratnam, has been ordered to pay $13.9 million to settle related civil charges.

The Securities and Exchange Commission, in announcing the fine, also cited an order by U.S. District Judge Jed Rakoff in Manhattan barring Gupta permanently from acting as an officer or director of a public company and from associating with any broker or investment adviser.

Gupta was convicted in June of passing tips gleaned during his service on the boards of directors at Goldman Sachs and Procter & Gamble. He was sentenced to two years in prison and fined $5 million but remains free on bail pending his appeal.

“Gupta was guilty of an egregious breach of trust involving multiple material disclosures of inside information,” Rakoff wrote. “His nearly unparalleled level of access to upper echelons of corporate executives throughout the world creates the risk that, notwithstanding his fall from grace, Gupta remains well-placed to repeat his misconduct in the future.”

George Canellos, SEC co-director of enforcement, said in a statement:

“The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve. If you abuse your position by sharing confidential company information with friends and business associates in exchange for private gain, you will be prosecuted to the fullest extent by the SEC.”


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note