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October 26, 2011 at 08:12 AM
NEW YORK (AP) — A former board member of Goldman Sachs and Procter & Gamble surrendered Wednesday to face a six-count securities fraud indictment that makes him the latest defendant in the biggest insider trading case in history.
The charges against Rajat Gupta were unsealed in U.S. District Court in Manhattan, where the indictment accused him of cheating the markets with Raj Rajaratnam, the convicted hedge fund founder who was the probe’s prime target.
Gupta, 62, of Westport, Conn., was awaiting an arraignment on one count of conspiracy to commit securities fraud and five counts of securities fraud.
The charges carry a potential penalty of 105 years in prison.
The Securities and Exchange Commissioner originally brought civil fraud charges against Gupta in March. The SEC alleged that, at the height of the financial crisis, he passed along privileged financial information that helped enrich Rajaratnam, a former billionaire hedge fund manager who was the prime target of the criminal probe.
Gupta’s lawyer responded by accusing the SEC of launching a “flawed case premised in large part on unreliable evidence being used in an attempt to bring down a man of sterling reputation and remarkable achievements without the procedural safeguards historically accorded to all persons similarly charged.”
In a release, U.S. Attorney Preet Bharara said Gupta broke the trust of some of the nation’s top public companies and “became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr. Gupta’s breach of duty.”
