Former Goldman Sachs director convicted of fraud Max Slater at 4:31 PM ET
[JURIST] Former Goldman Sachs [corporate website] director Rajat Gupta was convicted on Friday of three counts of securities fraud and one count of conspiracy to commit securities fraud. Gupta was also acquitted [AP report] on two other counts of securities fraud. Gupta was arrested [JURIST report] in October and charged with securities fraud relating to insider trading with hedge fund executive Raj Rajaratnam [JURIST news archive]. The US Securities and Exchange Commission [official website] conducted an investigation and alleged that Gupta disclosed material and nonpublic facts to Rajaratnam that he learned during Goldman Sachs board meetings.
Rajaratnam was convicted of 14 counts of insider trading [JURIST report] in May 2011 in the largest hedge fund insider trading case in US history. Several other defendants have pleaded guilty in connection with the case. Former hedge fund consultant Danielle Chiesi pleaded guilty [JURIST report] in January. Former IBM senior vice president Robert Moffat was sentenced to six months in prison in September and ordered him to pay a $50,000 fine for his role in the scheme after pleading guilty [JURIST reports] in March 2010. Former Intel Capital executive Rajiv Goel pleaded guilty [JURIST report] to insider trading charges in February 2010. Rajaratnam, Chiesi, Goel and Moffat were arrested in October 2009 and charged [complaint, PDF] along with two other individuals and two business entities with insider trading. The complaint alleged that the individuals provided Galleon Group and another hedge fund with material nonpublic information about several corporations upon which the funds traded, generating $25 million in illicit gain. Rajaratnam and Chiesi originally pleaded not guilty [JURIST report] in December 2009 after being indicted for insider trading.
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