A Connecticut business consultant who has served on the boards of Goldman Sachs and Procter & Gamble was charged on Tuesday with insider trading in the latest development in the far-reaching case involving Galleon Group LLC and its billionaire founder, Raj Rajaratnam.
The Securities and Exchange Commission announced the filing against Rajat K. Gupta, a friend and business manager of Rajaratnam. The SEC’s Division of Enforcement alleged that Gupta tipped Rajaratnam about the quarterly earnings of Goldman and P&G and about an impending $5 billion investment by Berkshire Hathaway in Goldman Sachs.
The SEC’s Division of Enforcement alleges that Gupta, a friend and business associate of Rajaratnam, acquired the confidential information during board sessions and in other aspects of his duties on the Goldman and P&G boards. While he was passing information to Rajaratnam, Gupta was investing in some of the Galleon funds that stood to make millions in illicit profits, the SEC said.
The SEC action comes just a few weeks after four hedge fund managers were charged with insider trading by U.S. Attorney Preet Bharara of the Southern District of New York, as reported by Main Justice. In November, the FBI raided the offices of three hedge funds, fueling rumors that the insider trading investigation might be one of the biggest in years.