US Corporate Executive Guilty in Stock Trading Case

Posted June 15th, 2012 at 1:45 pm (UTC-5)
Leave a comment

A New York jury has found a once-prominent U.S. corporate executive guilty of insider stock trading, convicting him of secretly giving key business information to a friend who used it to make profitable investments.

After deliberating for two days, the jury Friday convicted Calcutta-born Rajat Gupta of four counts of securities fraud and conspiracy, while acquitting him of two other charges. The 63-year-old businessman potentially faces decades in prison, but under U.S. penal guidelines is likely to receive a much shorter term when he is sentenced in October.

Gupta was once a director of one of Wall Street's biggest investment banking firms, Goldman Sachs, and a large consumer products company, Procter & Gamble. He was convicted of passing on inside corporate secrets of the two companies shortly after learning of them while serving on their boards of directors.

Prosecutors said he passed the information to Raj Rajaratnam, an investment fund manager, who used the secrets to help him make his investment choices. Rajaratnam was convicted in the scheme last year and sentenced to more than 11 years in prison.