Insider trading has been a target of both the Bush and Obama administrations. The case against Rajat Gupta, a former director of both Goldman Sachs and Procter & Gamble, is part of a major crackdown on insider trading.
A former member of the board of directors of Goldman Sachs and Procter & Gamble appeared in federal court in New York Wednesday to face charges that he leaked confidential information to a hedge fund manager who used the tips to earn easy profits and avoid significant losses.
Rajat Gupta, of Westport, Conn., pleaded not guilty and was released on $10 million bond. The case marks the latest development in a major crackdown on the insider trading on Wall Street that has been the target of both the Bush and Obama administrations.
The federal court is blocks from where Occupy Wall Street protesters have been demonstrating. Among their complaints: that Wall Street financial institutions have an inordinate amount of power, both political and economic, and that Wall Street greed has been to the detriment of the 99 percent of the public the movement claims to represent.
Mr. Gupta surrendered to FBI agents after a six-count indictment was unsealed alleging his involvement in an insider-trading scheme that extended from 2008 to January 2009. The charges include conspiracy to commit securities fraud and five counts of securities fraud.
Gupta allegedly passed “material nonpublic information” about Goldman Sachs and Procter & Gamble to Raj Rajaratnam, founder of the Galleon Group hedge funds.