WASHINGTON, March 1, 2011 (AFP) – The US markets regulator charged former Goldman Sachs and Procter & Gamble director Rajat Gupta on Tuesday with insider trading in a high-profile hedge fund case. The Securities and Exchange Commission announced the charges for “illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms, as well as an impending $5 billion investment by Berkshire Hathaway in Goldman.”
Gupta, “a friend and business associate of Rajaratnam,” provided him with confidential information he learned as a board member of Goldman and P&G, the SEC charged.
Rajaratnam allegedly used the inside information to trade on behalf of some of Galleon’s hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the companies.
The insider trading by Rajaratnam and others produced more than $18 million in illicit profits and loss avoidance, the regulator said.
Gupta, a Connecticut-based business consultant and former managing director of global consulting firm McKinsey & Company, was at the time of the insider trading a direct or indirec