Back in August, the Securities and Exchange Commission canceled an administrative inquiry into insider trading, a white collar crime, against Rajat K. Gupta, former director of Proctor & Gamble and Goldman Sachs.
Gupta was accused of giving insider information to billionaire Raj Rajaratnam. The S.E.C. backed down after Gupta filed suit against the commission for denying his right to a trial by jury, and for singling him out for harsher treatment than other defendants in the S.E.C. lawsuit received.
The presiding federal judge criticized the S.E.C. and granted permission for Gupta’s suit to advance. An attorney for Gupta called the allegations of the S.E.C. baseless, adding that their claims will not hold under scrutiny. A spokesman for the S.E.C. stated that the commission intended to pursue the case.
Last week, a United States attorney in Manhattan alleged that Gupta engaged in insider trading, violating the trust of business associates to enrich Rajaratnam. Gupta pleaded not guilty last Wednesday to five counts of securities fraud and one charge of conspiracy to commit securities fraud.
Gupta’s attorney stated that when the incidents in question occurred, Gupta had lost the entire amount he invested in a fund managed by Rajaratnam. Gupta had no reason to engage in an illegal activity that would ruin his dignified career.
Trial is set for April 9, 2012. The presiding judge will be same judge who ruled in Gupta’s favor in the prior S.E.C. lawsuit.
Source: DealBook, “With Gupta’s arrest, insider inquiry goes beyond Wall Street,” Azam Ahmed, Oct. 26, 2011