Rajat Gupta, a former director of Goldman Sachs Group Inc, was convicted of conspiracy and securities fraud by a federal court jury in Manhattan on Friday.
Ending the four-week trial, the court found 63-year-old Indian born Rajat Gupta quilty on three counts while acquitting of two counts. He was convicted of leaking boardroom information to his friend Raj Rajaratnam, co-founder of hedge fund management firm Galleon Group.
Rajat Gupta could end up behind the bars for years, as maximum prison sentence for securities fraud is 20 years and that of conspiracy is five years. He will be sentenced on October 18, 2012.
The investigation on the insider trading started in 2009. Rajaratnam, to whom Gupta is said to have leaked information about Goldman and Proctor & Gamble companies and confidential market information, was sentenced to 11 years years in prison after being convicted of insider trading last year.
Rajat Gupta's wife and four daughters broke down when the jury read out the verdict on Friday. He will be free on bail till he is sentenced in October.
However, Gupta's lawyer said that it's just the beginning of the case and would appeal before the court if needed. He added that they still believe Gupta acted with integrity and honesty and didn't receive any illegal financial benefit.
Who is Raj Rajaratnam?
Raj Rajaratnam is a Sri Lankan American. He is the founder of Galleon Group, a New York based hedge fund management firm. He is the richest Sri Lankan born person in the world and Forbes ranked him the 236th richest American in 2009.
Born in Sri Lanka on June 15, 1957, Raj Rajaratnam did engineering from the University of Sussex and went on to do M.B.A. from Wharton School of the University of Pennsylvania in 1983. He worked in several big companies like Chase Manhattan Bank and Needham & Co. before starting Galleon Group in 1992.
He was even featured in the book The New Investment Superstars and placed among the elite US money managers. However, his downfall started after he was charged on insider trading. He was arrested by the FBI on October 16, 2009 and his company Galleon Group closed down.
Raj Rajaratnam is currently serving an 11-years jail term after the court found him guilty of all 14 counts of conspiracy and securities fraud in 2011.