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Former Goldman Sachs director Gupta guilty of insider trading

June 15, 2012|By Andrew Tangel

New York — A jury has convicted former Goldman Sachs director Rajat Gupta in his high-profile insider-trading case in New York.

A federal jury had been weighing Gupta’s fate for two days. The jury of eight women and four men found Gupta guilty of four criminal counts in a wide government push against insider trading.

Gupta was found guilty of three counts of securities fraud and one count of conspiracy for leaking stock tips to Raj Rajaratnam, head of the Galleon Group hedge fund. He was acquitted on two counts of securities fraud.

Each fraud charge carries a sentence of up to 20 years in prison; the conspiracy charge could result in up to five years. Gupta will be sentenced on Oct. 18.

Gupta, 63, was the highest-profile defendant to face federal charges in a wide-ranging insider-trading scheme headed by Raj Rajaratnam.

Rajaratnam was found guilty last year and sentenced to 11 years in prison.

Like Rajaratnam’s trial, Gupta’s had its share of Wall Street star power. His trial featured multiple days of testimony by Goldman's chairman and chief executive officer, Lloyd Blankfein, as well as videotaped testimony by Ajit Jain, who is seen as a potential successor to legendary investor Warren Buffett to run Berkshire Hathaway.

Federal prosecutors in Manhattan produced emails, phone records and other documents in their bid to prove Gupta was a highly placed tipster for Rajaratnam, providing illegal inside information to Rajaratnam, head of the Galleon Group hedge fund.

Gupta's defense team portrayed the government's case as circumstantial, arguing in part that the well-connected Rajaratnam could have gotten tips elsewhere on Wall Street.

Gupta chose not to testify at his own trial.

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