New York (HedgeCo.net) – Former Goldman Sachs director Rajat Gupta has been charged with allegedly tipping hedge fund manager Raj Rajaratnam off to insider information in the giant SEC vs. Galleon case.
Gupta is alleged to have told Rajaratnam of a $5 billion investment by Warren Buffett in Goldman Sachs before the information became public.
“The Galleon hedge fund managed to buy nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett’s investment was disclosed.” Bloomberg reports. Rajaratnam is said to have sold the stock for a $900,000 profit.
The charges are “totally baseless,” Gary Naftalis, Gupta’s lawyer said, adding that Gupta is not accused of trading in the stocks himself or sharing in any profits. Naftalis said Gupta did nothing wrong and stands by his 40-year record of ethical conduct, integrity and commitment to keeping clients’ confidence.
Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme. He is being accused of insider trading and securities fraud, generating as much as $49 million in profit. The majority of the stocks involved are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.
Alex Akesson
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