Westport resident Rajat K. Gupta, the former Goldman Sachs and Procter & Gamble director accused by the Securities and Exchange Commission (SEC) of leaking confidential information, will surrender to federal authorities on Wednesday, published reports said tonight.
Rajat Gupta: federal charges reportedly pending. File photo
Quoting people briefed on the case, The New York Times and The Wall Street Journal said federal prosecutors are expected to file criminal charges against Gupta for allegedly leaking inside information to Galleon Group hedge fund founder Raj Rajaratnam.
Gupta, the longtime head of consulting firm McKinsey & Company who lives in Westport’s Greens Farms area, has been under investigation for months over whether he leaked corporate secrets to Rajaratnam, who was sentenced this month to 11 years in prison for trading on illegal stock tips.
The New York Times noted while there has been no indication yet that Gupta profited directly from the information he passed to Rajaratnam, securities laws prohibit company insiders from divulging corporate secrets to those who then profit from them.
The Times said a spokeswoman for the United States attorney in Manhattan declined to comment.
Gary P. Naftalis, a lawyer for Gupta, said in a statement: “The facts demonstrate that Mr. Gupta is an innocent man and that he acted with honesty and integrity,” the Times said.
In August, the SEC dropped its administrative proceeding against Gupta, handing him a victory in his legal battle with the agency. But it said it intended to pursue its case in federal court. (See WestportNow Aug. 5, 2011)
“The commission has determined that it is in the public interest to dismiss these proceedings,” the SEC said in a two-page order.
Rajat Gupta hosted a 2008 fund-raiser at his Greens Farms home for Speaker of the House Nancy Pelosi and U.S. House candidate Jim Himes. (CLICK TO ENLARGE) WestportNow.com photo
The SEC brought the administrative case against Gupta in March, (see WestportNow March 1, 2011) alleging that he provided insider tips about Goldman to Rajaratnam at the height of the financial crisis in 2008.
Gupta and his wife Anita have maintained a relatively low profile in Westport, as is the case with most of the wealthy inhabitants along Beachside Avenue.
In September 2008, the couple did open their home for a Democratic fund-raiser for Jim Himes, the now second-term Democrat representing the 4th Congressional District. Special guest was Nancy Pelosi, then Speaker of the House.
According to public records, the Guptas purchased the eight-bedroom, eight-bath, 1920-built home on 2.28 acres in 1999 for $6.125 million. The home, once owned by legendary retailer J.C. Penney, was assessed in the latest revaluation at $12.482 million.
Rajat Gupta purchased his eight-bedroom, eight-bath home on Beachside Avenue in 1999. Built in 1920 and once owned by J.C. Penney, it is valued as just under $12.5 million. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com
In 2003 on a sunny Friday afternoon in June when he retired from McKinsey & Co, Gupta was greeted at his Westport waterfront home by scores of his McKinsey & Co. partners, Bloomberg Markets magazine reported in July.
They had come from London, Frankfurt, New Delhi and other cities around the world—and brought along an elephant, which they tethered on the front lawn, the magazine said.
Gupta was stepping down after nine years as managing director of the global consulting firm, and his colleagues were gathered to celebrate his tenure and wish him the best in the next phase of his career.
“They offered champagne toasts and took photos of Gupta, standing next to the elephant, which was draped in a brightly colored shawl called a jhool,” the magazine said.
“The decorated elephant represented the Hindu god Ganesh, who bestows good fortune on new ventures. Gupta smiled as he rested his arm on its trunk.”
