Former Goldman Sachs director Rajat Gupta charged with insider trading, helping hedge fund hukster

Lukas I. Alpert New York Daily News 03/01/2011 18:19

Rajat Gupta has been accused of insider trading related to the Galleon hedge fund scandal.

A former Goldman Sachs director was charged Tuesday with insider trading for allegedly feeding illegal stock tips to a billionaire buddy - hedge fund huckster Raj Rajaratnam.

Rajat Gupta allegedly tipped his pal before the public learned of a $5 billion investment by Warren Buffett to prop up Goldman during the height of the economic crisis.

The info allowed Rajaratnam's Galleon hedge fund to scoop up nearly 300,000 shares of Goldman stock just before the markets closed. The shares soared when news of Buffett's investment was disclosed.

Rajaratnam sold the stock the next day for a $900,000 profit.

He was arrested in 2009 on securities fraud charges of making $50 million in profit off inside information. He is set to go on trial next week in Manhattan Federal Court in the biggest hedge fund insider-trading case ever.

Gupta, who faces civil Securities and Exchange Commission charges, is also accused of handing Rajaratnam confidential financial reports from Goldman and Procter & Gamble.

Gupta, 62, served on P&G's board of directors from 2006 until last May.

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