Allegation / Scandal details:

Apart from Rajat Gupta, the investigation also led to conviction of Raj Rajaratnam – a Sri Lanka born
entrepreneur and founder of Hedge Fund – Galleon. Raj had been a close aide of Rajat Gupta and
had even contributed for setting up the Indian School of Business in 1997. Rajat Gupta also had
major investments in the Raj’s ventures – which were both commercial and philanthropic in nature.

The major details of the event are as under:

 As a Board Member of Goldman Sachs, Rajat Gupta was privy to information regarding
upcoming investment decisions by Warren Buffets’ Berkshire Hathaway into Goldman Sachs
on September 21, 2008.
 Based on extensive wire taps the prosecutors were able to establish that this information
was passed on to Raj Rajaratnam on September 22, 2008, just one week after the collapse of
Lehman Brothers.
 Basis this information, Galleon bought more than 100,000 shares of Goldman Sachs. The
prosecution found that this decision led to Galleon making more than 14 Million USD in
profits and avoiding 3 Million USD in losses.

Rajat Gupta was charged on six counts of securities fraud and conspiracy. The jury found him guilty
on four counts including conspiracy and Insider Trading and not guilty on two counts of securities
fraud charges awarding a jail term of two years.

While the other convicts like Raj Rajaratnam and Anil Kumar got longer terms, major international
personalities from former UN secretary general Kofi Annan to new age Guru Deepak Chopra wrote in
his defence asking for leniency. While sentencing him to two years in prison, Judge Rakoff said: “He
is a good man. However, the history of this country and the history of the world is full of examples of
good men who did bad things."