New York (HedgeCo.net) – Being entangled with the Galleon hedge fund scandal was just the tip of the iceberg for former McKinsey partner Rajat Gupta, according to the 2011 July issue of Bloomberg Markets magazine.
At McKinsey, a firm known for keeping secrets, Gupta harbored a few of his own, Bloomberg says. As the managing director and then as senior partner of McKinsey for four more years before he retired, he ran his own consulting business on the side — a violation of McKinsey rules.
He and Anil Kumar, a former McKinsey partner who last year pleaded guilty to passing confidential information to hedge fund manager Rajaratnam, set up their own consulting company, Mindspirit LLC. Gupta also independently advised Genpact Ltd. (G), a Gurgaon, India-based firm that manages business processes for other companies. That work, too, broke McKinsey’s rules.
“It has always been a clear violation of our values and professional standards for any firm member to provide consulting or advisory services outside of McKinsey for personal monetary gain,” says Michael Stewart, a McKinsey partner and director of communications in a rare on-the-record statement.
McKinsey conducted an internal investigation of Gupta and Kumar, and has cooperated with prosecutors and the SEC.
In 2001, Gupta and Kumar set up their own consulting company, Mindspirit LLC, in the names of their wives, Anita Gupta and Malvika Kumar, according to a filing with the SEC by Omaha-based InfoGroup Inc. The two men, working for Mindspirit, gave advice to the company’s CEO, according to the SEC filing.
InfoGroup, a database company, compensated Mindspirit with 200,000 stock options, which the consulting company exercised for an undisclosed amount, the filing said. Bill Clinton, honorary chairman of the American India Foundation and another InfoGroup consultant, according to the filing, was also granted 100,000 stock options he never exercised, Bloomberg reported.
Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership in HedgeCo.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
