The biggest Wall Street figure implicated in the nsider trading probe was convicted Friday of passing secret information to a billionaire hedge fund pal.
Rajat Gupta, 63, clenched his jaw and then sat stone-faced as he was found guilty in Manhattan Federal Court of one count of conspiracy and three counts of securities fraud.
His wife Anita, and his four daughters, who sat in the first row of seats throughout the trial, burst into tears and consoled each other.
Jury foreman Rick Lepkowski, 51, of Ossining, said when he looked at Gupta, who grew up poor in India and rose to the top ranks of American business, he saw a man who was an example of the American Dream and lived a “story-book life.”
“I wanted to believe that the allegations were not true, but at the end of the day the evidence where we found guilty was overwhelming,” said Lepkowski, 51 , an executive for a nonprofit organization.
Juror Ronnie Sesso, 53, a employee for the city’s Administration for Children Services, was one of the jurors seen wiping away tears as the panel of four men and eight women walked out of the courtroom after the verdict.
“We were all pretty emotional afterward,” she said.
When asked what could have motivated Gupta she said, “It was a need for greed.”
Two of the securities fraud counts Gupta was found guilty of related to a tip about a Warren Buffet investment that he passed to Galleon Group founder Raj Rajaratnam before it was announced to the public on Sept. 23, 2008. Check out all the Biggest Wall Stredet Insider Trader Cases
Gupta called Rajaratnam just 16 seconds after the Goldman board approved Buffet’s $5 billion investment in the company, which came in the midst of the financial crisis and was meant to allay concerns in the investor community.
With just minutes before the close of trading that day, Rajaratnam tried to buy 350,000 shares of Goldman stock and ended up buying 217,500 shares, worth $27 million, before the bell rang.
The next day Rajaratnam liquidated his position, earning $840,000 in illegal profits and boasted during a phone call that was recorded and played for the jury that he had heard “something good about Goldman” the previous day.
Lepkowski said the wiretap evidence, which the defense sought to suppress before the trial, was “certainly a very important part of the body to convict.”
Rajaratnam was found guilty of insider trading last year and was sentenced to 11 years in prison.
Since his arrest in 2009, the feds have obtained more than 60 convictions on insider shenanigans.
Gupta is the former head of consultant company McKinsey & Co. and owns a waterfront estate in Westport, Conn.
The charges he was convicted on carry a maximum prison sentence of 25 years when is sentenced Oct. 18 by Judge Jed Rakoff.
“Rajat Gupta once stood at the apex of the international business community. Today, he stands convicted of securities fraud,” said Manhattan U.S. Attorney Preet Bharara.
“Having fallen from respected insider to convicted inside trader, Mr. Gupta has now exchanged the lofty board room for the prospect of a lowly jail cell.”
Defense attorney Gary Naftalis said after the verdict that Gupta was innocent — and vowed to appeal.
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