Ex-Goldman Sachs director indicted for insider trading

Former Goldman Sachs director, Rajat K. Gupta, was accused of leaking confidential information while working at the investment bank and Procter & Gamble Co., the Wall Street Journal reports.

Gupta, a former head of global consulting firm McKinsey & Co., was indicted today on five counts of securities fraud and one count of conspiracy to commit securities fraud, Bloomberg BusinessWeek reports. The counts include allegedly leaking details about the companies’ financial condition and an investment by Warren Buffett’s Berkshire Hathway Inc. to former hedge-fund manager Raj Rajaratnam, who was sentenced earlier this month to serve 11 years in prison for insider trading, WSJ reports.

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Gupta, 62, surrendered to the FBI Wednesday morning as a part of wide-spread investigation of insider trading on Wall Street, the Los Angeles Times reports. He was accused earlier this year by the Securities and Exchange Commission found him allegedly improperly sharing information he learned while at Goldman Sachs Group Inc. But since then Gupta’s case received little attention and he sued the SEC this summer, accusing the agency of treating him unfairly by pursuing him through administrative proceedings rather than more typical lawsuit or criminal charges, the LA Times reports.

Gupta is the highest-ranking executive to be charged in the insider trading crackdown that was spurred by Rajaratnam, Bloomberg BusinessWeek reports. The indictment, which was unsealed in Manhattan’s Federal Court today, also came with the SEC suing Gupta.

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“Rajat Gupta was entrusted by some of the premier institutions of American business to sit inside their boardrooms, among their executives and directors, and receive their confidential information so that he could give advice and counsel for the benefit of their shareholders,” Preet Bharara, the United States attorney in Manhattan, said in a statement, the New York Times reports. “As alleged, he broke that trust and instead became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr. Gupta’s breach of duty.”