NSR co-founder Rajat Gupta indicted for insider trading
Chairman and Co-Founder of New Silk Route (NSR) Rajat Gupta was indicted for insider trading by a US federal court on Wednesday. He is charged with one count of conspiracy and five counts of securities fraud.
Gupta, who founded NSR in 2006, stands accused of passing classified information - which he gained from his executive roles at Goldman Sachs and Procter & Gamble - to Raj Rajartnam, the disgraced founder of hedge fund Galleon. According to the SEC, Gupta's tip-offs helped Galleon gain $18 million, and included information regarding Berkshire Hathaway's $5 billion investment in Goldman Sachs.
The Securities and Exchange Commission said Gupta contacted Rajartnam 16 seconds after the close of a Goldman board meeting in September 2008 to alert his friend of the Berkshire transaction. He was also said to have contacted Rajartnam 23 seconds after another board meeting a month later to convey news of Goldman's first public quarterly loss.
Rajartnam has already been sentenced to an 11-year prison term.
Upon the verdict, Gupta surrendered to the US Federal Bureau of Investigation. After pleading not guilty, he was released on a $10 million bond. He faces an up to 20-year prison penalty on each of the six charges of fraud.
Gupta has held the post of senior partner emeritus at McKinsey & Company, as well as board positions at Goldman Sachs, Procter & Gamble, American Airlines Harman International and Qatar Financial Centre. According to NSR's website, Gupta is involved in many non-profit institutions focused on education, health and development and has been elected to lead the International Chamber of Commerce (ICC). He also served as the United Nations Secretary-General's Special Advisor on UN Reform.
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