Former Goldman Sachs Director, Rajat Gupta, one of the most prominent Indian-American, on Wednesday surrendered before the FBI in New York in connection with a massive insider trading scam. An FBI official told the reporters on condition of anonymity that Gupta surrendered to the Manhattan office of the FBI in New York at 8:10 am today. The official said that the kind of charge levelled against the 62-year-old Gupta was that the charges against him are expected to be filed later in the day. When asked specifically whether Gupta had been arrested the official said that he has surrendered to the FBI and once in the FBI custody, he is under arrest. He came under the scanner after prosecutors charged his Sri Lankan born Hedge fund billionaire friend Raj Rajaratnam on insider trading charges. Rajaratnam had been sentenced to 11 years imprisonment.
Securities Law prohibits company insiders from exposing corporate secrets to those who earn profit from them. Mr. Gupta, who is a native of Kolkata had a impressive rise to corporate success after he graduated from Harvard Business School. He had advised business leaders like General Electric's Jeffrey Immelt and Henry Kravis of the private equity from the Kohlberg Kravis Roberts & Company. He had also served as special adviser to the United Nations.
Mr. Gupta's name emerged in the insider trading scheme a week before Rajaratnam's trial in March, when the Securities and Exchange Commission filed an administrative proceedings against him accusing him of revealing confidential information about Goldman Sachs and Procter and Gamble to Rajaratnam, who then traded on the information and earned profit out of the same.
News reported by AR for Newsvision online newspaper
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