Ex-Goldman board member Gupta convicted of insider trading

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6/15/2012

Rajat Gupta, a former Goldman Sachs board member, was found guilty Friday of slipping secrets about the bank to a hedge fund manager in the latest high-profile trial stemming from a broad federal probe on insider trading.

A Manhattan federal court jury, which began deliberations Thursday, convicted Gupta on four of six counts of passing confidential information to billionaire Raj Rajaratnam, manager and founder of the Galleon hedge fund. Rajaratnam, Gupta's former friend, is serving an 11-year sentence for making over $50 million on insider trading.

Gupta, who was found guilty of three counts of securities fraud and one count of conspiracy, faces a decade in prison himself. He will be sentenced later this year.
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The verdict marks a stunning fall for Gupta, who is also a former top executive at business consulting firm McKinsey & Co and a former director of Procter & Gamble.

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The U.S. government crackdown on insider trading has led to guilty verdicts or plea bargains of scores of executives, lawyers and financial consultants.