A federal jury in the US has found former Goldman Sachs director Rajat Gupta guilty of leaking confidential information about the bank. Gupta allegedly tipped his hedge fund manager friend, Raj Rajaratnam, three times with price-sensitive information from Goldman Sachs's boardroom. In the RCE Newsletter April 2012 we mentioned the SEC investigation concerning insider dealing at Galleon. This investigation resulted in the criminal conviction of Raj Rajaratnam last year. He was sentenced to 11 years in prison.

In 2008-2009 Galleon bought Goldman Sachs shares, just before a large investor, Warren Buffet, was to make an investment in the bank. Galleon sold the shares just before Goldman Sachs announced unexpected quarterly losses. Based on the recordings of telephone conversations, the authorities alleged during the trial that Rajat Gupta provided tips to Raj Rajaratnam. Gupta faces a maximum term of imprisonment of 25 years. Sentencing in the case is scheduled for 18 October 2012.

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