Rajat Gupta, a resident of Westport's Beachside Avenue, is being sued by the Securities and Exchange Commission for allegedly giving insider trading information to a hedge fund manager, published reports say.
Gupta, 61, a former director of Goldman Sachs and Procter & Gamble, is accused of providing his friend and businesses associate Raj Rajaratnam, founder and hedge fund manager of Galleon Management, with confidential information about quarterly earnings at both firms and an impending $5 billion investment by Berkshire Hathaway in Goldman Sachs.
Gupta, who formerly headed McKinsey & Co., resigned from Procter & Gamble on Tuesday and is no longer on the board at Goldman Sachs. Information Gupta provided Rajaratnam reportedly generated more than $18 million in illicit profits, the SEC reported.
"Gupta was honored with the highest trust of leading public companies, and he betrayed that trust by disclosing their most sensitive and valuable secrets," said Robert Khuzami, director of the SEC's Division of Enforcement, in a statement. "Directors who violate the sanctity of board room confidences for private gain will be held to account for their illegal actions."
Gary Naftalis, Gupta's lawyer, denies the SEC's allegations, calling them "totally baseless." "Mr. Gupta's 40-year record of ethical conduct, integrity, and commitment to guarding his clients' confidences is beyond reproach," Naftalis said in a statement. "Mr. Gupta has done nothing wrong and is confident that these unfounded allegations will be rejected by any fair and impartial fact finder."
Criminal charges have yet to be filed against Gupta, who lives in an eight-bedroom, eight-bathroom home valued at $12.5 million.