Top 10 Articles
Jun 15, 2012
The federal government has succeeded in getting Rajat Gupta, under whose leadership McKinsey and Co. nearly tripled its revenues, convicted of "securities fraud" for acts that, even if he committed them, are not fraud. The verdict was guilty on three counts of "securities fraud" and one of conspiracy, not guilty on two counts of "securities fraud."
"Here’s a man who came to this country and was a wonderful example of the American dream," said nonprofit executive Rich Lepkowski, who led the jury. "We wanted to believe that the allegations weren’t true, but at the end of the day the evidence was just overwhelming." The jury reached its verdict by the middle of the day today, Friday, deliberating less than two full days after Wednesday's closing arguments.
Another juror expressed a different attitude toward the defendant and his pursuit of wealth. "What did Mr. Gupta get by giving Raj this information?" asked Ronnie Sesso, who is associated with a city bureaucracy. "A need for greed."
Gupta, whose father, a journalist and advocate of Indian independence from Britain, went to jail over politics, is to learn his own sentence Oct. 18. The maximum is twenty years per fraud charge, plus five for conspiracy; the Wall Street Journal predicts a "significantly lower" term. Raj Rajaratnam, the beneficiary of the tips Gupta was convicted of giving, was sentenced to eleven years.
The Department of Justice has been cracking down on insider trading since October 2009, and no defendant has yet successfully defended himself.
Gupta was accused of leaking information he obtained as a director of Goldman Sachs and Procter & Gamble. Goldman may seem unsympathetic to many people because of its ties to and use of the federal government. But cronyism was not an issue in the case, and should not affect our judgment of it.