• 30
  • January
    2012

Attorneys for a former Goldman Sachs Group and Procter & Gamble Co. director are reportedly investigating whether convicted inside trader Raj Rajaratnam had a source other than their client at the two companies.

Rajat Gupta denies allegations that he participated in white collar crimes by illegally giving Rajaratnam inside information about the companies.

Late last year, Rajaratnam, founder of the Galleon Group, was sentenced to 11 years in prison and fined $10 million for conspiracy and securities fraud.

He was also ordered to forfeit $53.8 million in profits from the alleged insider trading scheme.

The case was widely considered to be the biggest insider trading case in the federal government's recent crackdown on the activity. With Rajaratnam, government investigators for the first time ever in an insider trading case, used wiretaps to record phone conversations between suspects.

Investigators also used pressure on traders to get them to wear devices to record conversations with suspects.

Gupta contends that he wasn't part of the fraud alleged at Galleon Group.

However, an Assistant U.S. Attorney in the Gupta case told the judge that prosecutors have "no information -- zero" about any other source of illicit information for Rajaratnam at Proctor & Gamble and Goldman Sachs.

The U.S. District Court Judge nevertheless told the defense attorneys that federal prosecutors will point them to areas in the documents the defense already has which might contain a potential source of leaked information.

Gupta is scheduled to go to trial in April on one count of conspiracy and five counts of securities fraud. He faces up to 20 years in prison on the fraud charges and five years on the conspiracy charge.

Source: Bloomberg.com: "Gupta, JPMorgan, Goldman, Stanford, Carnival in Court News," Elizabeth Amon, Jan. 30, 2012