After just two days of deliberations, a Manhattan federal court jury found prominent businessman Rajat Gupta guilty of insider trading on Friday.
The verdict is seen as a major victory for federal prosecutors, who have secured numerous convictions resulting from a sweeping investigation of Wall Street misconduct.
Gupta, a former director at Goldman Sachs (GS) and Procter & Gamble (PG), was found guilty of three counts of securities fraud and one count of conspiracy. He was acquitted of two other securities fraud charges.
Prosecutors claimed that Gupta passed confidential information to hedge fund titan Raj Rajaratnam, who was convicted of insider trading and sentenced to 11 years in prison last year.
Gupta, who also served as head of consulting firm McKinsey & Co., could face up to 25 years in prison as a result of the verdict, although the 63-year old is not expected to receive the maximum sentence.
District judge Jed Rakoff has scheduled sentencing for October 18th, and Gupta will remain free on bail until then.
SEC Enforcement Director Robert Khuzami said, "Today's guilty verdict sends a very strong message to corporate America and to Wall Street that those who engage in insider trading, irrespective of their station in life, can expect to be prosecuted to the fullest extent of the law."
Gupta's attorneys indicated that their client will likely appeal the verdict and continued to claim that he is innocent of all the charges.
The defense argued that the evidence against Gupta was circumstantial and that the prosecution did not provide any "real, hard, direct evidence." Gupta did not take the stand in his own defense.
The sweeping investigation of insider trading on Wall Street has led to 66 indictments against traders and corporate executives since 2009. Of those, 60 have either pleaded guilty or been found guilty, while six cases are pending.
by RTT Staff Writer
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