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Rajat Gupta - chief of global consulting business McKinsey & Co
  • Elected managing director of the firm in 1994 and served until 2003. He stepped down as a partner of the firm in 2007.



Rajat Gupta strikes back at US regulator

Washington, March 19, 2011: Former Goldman Sachs Indian American director Rajat Gupta has sued the Securities and Exchange Commission (SEC), accusing the US regulator of "unfairly and unconstitutionally" connecting him to the biggest insider trading case in the US.

Earlier this month, the SEC filed charges against Gupta, former head of consultancy McKinsey & Co. accusing him of giving inside information about Goldman Sachs to his friend and business partner Raj Rajaratnam.

Sri Lankan born Rajaratnam, former head of the Galleon hedge funds, is on trial in a Manhattan federal court on 14 counts of insider trading. He has denied any wrongdoing.

The SEC alleges that when he was a Goldman Sachs director, Gupta tipped Rajaratnam on Goldman earnings and the $5 billion Berkshire Hathaway investment, as well as other material, non-public information about the bank, which Rajaratnam then allegedly traded on.

In a suit filed Friday in the same federal court where Rajaratnam is being tried, Gupta, 62, said the regulator should have filed a lawsuit instead.

"Gupta denies all allegations of wrongdoing and stands ready to mount a defence against each and every one of the commission's charges," his lawyer, Gary Naftalis, said in the complaint.

Gupta seeks a jury trial and to have the SEC barred from asking for civil penalties. He is also seeking a court order keeping the agency from pursuing its administrative claims.

Under SEC rules, Gupta isn't allowed a jury trial in an administrative action, or the right to use federal court rules on discovery, which require the exchange of evidence with the government, Naftalis said.

The suit argues that the SEC proceeding will deny Gupta a number of legal protections he would have in federal court, including a trial by jury.

Gupta's lawyer has said Gupta did nothing wrong, and the new suit says "there is no plausible reason why Gupta would have deviated from a lifetime of probity and a career dedicated to safeguarding corporate confidences in favour of engaging in the significant and aberrational wrongdoing alleged."

In addition to the complaints about the SEC's methods, the new suit reviews Gupta's background as the child of a
teacher and a "prominent freedom fighter" in India, and notes that "he has devoted approximately half of his time to a number of significant public service commitments." ...IANS


Taped call suggests Rajat Gupta told Rajaratnam about Goldman plans

New York, March 16 (IANS) Rajat Gupta, a former Indian American Goldman Sachs director, told hedge fund tycoon Raj Rajaratnam the investment bank was considering buying a commercial bank, according to a wiretapped telephone conversation played in court.

In a July 29, 2008 conversation played Tuesday in a New York court, where Rajaratnam, co-founder of the hedge fund Galleon Group, is on trial, Gupta told him Goldman was weighing an acquisition of either Wachovia or American International Group (AIG).

Rajaratnam, working from his Greenwich, Connecticut, home that day, told Gupta that he was meeting with Gary D. Cohn, the president of Goldman, later in the week. He asked Gupta about a rumour that Goldman might look to buy a commercial

'This was a big discussion at a board meeting,' Gupta said on the taped call. 'And, you know, it was, uh, a divided discussion in the board.'

Goldman was bearish on commercial banks, he said, but the board was 'opportunistic' and if Wachovia 'was a good deal they'd go and buy Wachovia.'

Gupta also said that the board was weighing the acquisition of an insurance business, including AIG. 'Yes, AIG was in the discussion mix,' he said. Ultimately, Gupta concluded, 'I would be extremely surprised' if there was 'anything imminent.'

The detailed discussion of Goldman's board meeting is the first time the government has disclosed specific comments made by Gupta to Rajaratnam about the bank's internal dealings.

Rajaratnam and Gupta are also heard discussing former Indian American McKinsey & Co. partner Anil Kumar, prosecution's star witness in the biggest US insider-dealing trial in decades.

'He is constantly ... scheming is not the right word, but constantly trying to figure what other people's angles are,' Rajaratnam said to Gupta.

t another point Rajaratnam says of Kumar, 'I'm getting a feeling that he's trying to ... you know, be a mini Rajat, right?'

He goes on to say: 'And I, you know, honestly, Rajat, I'm giving him a million dollars a year for doing literally nothing.'

Earlier this month, the Securities and Exchange Commission alleged in a civil case that Gupta had passed along inside information about Goldman to Rajaratnam.

An attorney for Gupta, who left Goldman's board in May, has said he hasn't been accused of trading on stock tips, or being compensated for the information he allegedly gave Rajaratnam.





Rajat Gupta was a senior partner of McKinsey & Company. He joined the firm's New York office in 1973, assumed leadership of its Scandinavian offices in 1981, and joined the Chicago office in 1987. He assumed the role of office manager there in 1989, was elected managing director of the firm in 1994 and served until 2003. He stepped down as a partner of the firm in 2007.

Born on December 2, 1948, Kolkata, India

  • Live in Westport, CT
  • Net worth- over $100 million
  • Live with wife Anita Mattoo Gupta
  • Four children
  • holds a bachelor of technology degree in Mechanical Engineering from IIT
  • M.B.A. from Harvard Business School
  • His father, Ashwini Kumar Gupta was a journalist, a prominent freedom fighter and start the newspaper Hindustan Standard in New Delhi. Pran died when Rajat was sixteen and his wife died after two years

McKinsey was founded by James O. McKinsey in 1926. More than 75 years later, the firm has grown into a global partnership serving three of the world's five largest companies and two-thirds of the Fortune 1000.McKinsey already had an established practice in budgeting and finance when he decided to test his theory that so-called "management engineers" could go beyond rescuing sick companies to helping healthy companies thrive and grow