More detail on Rajat Gupta, the Goldman Sachs director who is being investigated for passing inside information about Goldman to Raj Rajaratnam at Galleon Group…
The government says Gupta told Rajaratnam in advance about the investment Buffett made in Goldman in the depths of the financial crisis, Susan Pulliam at the WSJ reports. He also allegedly told Rajaratnam about Goldman’s earnings results ahead of their release in June and September 2008.
Gupta hasn’t (yet) been charged with anything. He continues to deny wrongdoing.
To actually charge Gupta with a crime, prosecutors would have to prove that he intentionally passed this information to Rajaratnam. The prosecutors may have the evidence on phone wiretaps. Gupta also apparently met Rajaratnam in Raj’s office “several times a month,” which itself creates the impression of impropriety (how many non-colleagues do you visit in their offices several times a month?)
If there is solid evidence that Gupta passed this information to Rajaratnam, it will be devastating to his reputation, and another blow to Goldman Sachs’s.
Gupta is effectively resigning from the Goldman board in the wake of the investigation news (he’s not standing for re-election). He didn’t attend a board meeting last week. He is also a board member of AMR and Procter & Gamble. If the news above is true, we assume he will soon be resigning from those boards, too.
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