The Securities and Exchange Commission has dropped administrative proceedings against Rajat K. Gupta, a former director of Goldman Sachs and Procter & Gamble who federal prosecutors have called an unindicted co-conspirator in the case of hedge fund manager Raj Rajaratnam, The New York Times’ Dealbook reported.
Gupta has faced an unusual civil administrative challenge from the SEC since March. He was accused of passing board secrets to Rajaratnam, who was convicted of insider trading in May.
But because Gupta’s case was an administrative proceeding, and not a federal lawsuit, it would have gone before an SEC administrative law judge in Washington.
That prompted Gupta’s lawyers to back at the SEC with a lawsuit accusing the agency of denying Gupta his right to a jury trial and of treating him differently than other defendants with connections to Rajaratnam, who have all faced suits in federal court.
Judge Jed S. Rakoff allowed that lawsuit to proceed last month with a ruling that criticized the SEC for bringing an administrative proceeding instead of a federal suit. But with the proceedings dropped, Gupta has agreed to drop his lawsuit, according to court documents.
“Mr. Gupta is very pleased that as a result of his lawsuit, the SEC has dismissed its administrative proceeding and he will no longer be singled out for disparate treatment,” Gupta’s attorney, Gary P. Naftalis, said in a statement. “As we’ve said previously, the SEC’s allegations are totally baseless and cannot withstand scrutiny.”