Two-year
jail term to Rajat Gupta
A U.S.
court sentenced Rajat Gupta (63), the former Goldman Sachs Director and McKinsey and
Company Managing Partner a 2 year jail term.
Who is
Rajat Gupta and what is the case?
§ Rajat
Kumar Gupta, is an Indian American Businessman. He was global head of
McKinsey & Company, the management consulting firm from 1994 to 2003 and a
business leader in India and the United States.
§ After his
rise in McKinsey, he was known as the “First India-born CEO of a global
corporation”.
§ Gupta
also chaired as corporate chairman, board director or strategic advisor to a
variety of large and notable organizations including Goldman Sachs, Procter and
Gamble and American Airlines, and non-profits including The Gates Foundation,
The Global Fund and the International Chamber of Commerce.
The case:
In 2007
when Gupta was Director of Goldman Sachs, he provided confidential information
about the company’s investment plan and earning details, which are considered
Non-Public information, to Raj Rajaratnam. He leaked the
information of $ 5 billion investment which was to be made by Berkshire
Hathaway into Goldman Sachs.Rajaratnam traded on the information
and made profits. It was
alleged
that Gupta also had some vested interest in Rajaratnam company- Galleon and he
also got some benefits through that trading which is considered as Insider
Trading- a corporate crime. It was also alleged that Gupta passed on non-
public information about Procter & Gamble to Rajaratnam where he leaked
info about company’s sale of its assets worth $ 3 billion and about its
quarterly earnings which were not made public.
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