Q1.

Describe and give your opinion with justification

about howAFTER
•IN 2003, Gupta made his THREE
COMPLETING choices postASMcKinsey?
TERMS MANAGING
DIRECTOR, GUPTA STEPPED DOWN FROM HIS ROLE AS
MANAGING PARTNER.
•POST MCKINSEY,HE SERVED AS BOARD MEMBER OF
DIFFERENT PUBLIC COMPANY.
•RAJAT GUPTA ALSOBECAME INTERESTED IN THE WORLD OF
PRIVATE EQUITY AND HEDGE FUNDS.
•HESTARTED DIFFERENT VENTURES WITH DIFFERENT
PEOPLE.
Q2. What do you understand by Insider
Trading? Was it a clear cut case of insider
trading? How compelling is the case?
 Insider Trading Insider trading involves trading in a public company's stock by
someone who has non-public, material information about that stock for any reason.
Regulatory scrutiny arises in the 2 cases when an individual with fudiciary
relationship with the firm having material, on public information-Trades himself
Tipping information to others
 In this case, There was evidence of Mr. Rajat Gupta tipping his friend Mr. Rajaratnam
on 3 different occasions
–March 12, 2007, Mr. Gupta unlawfully disclosed material non public information
regarding Goldman Sach’s First quarter Earnings. Rajaratnam benefitted by
purchasing 350,000 shares on the very same day.
-September 23, 2008, Mr. Gupta unlawfully disclosed material non public
information regarding Warren Buffet’s $5 billion in Goldman Sach’s. Mr. Rajaratnam
bought 150,000 and 67,200 shares.
-October 24, 2008, this time Mr. Gupta unlawfully disclosed material non public
information regarding Goldman Sach’s having lost money for the quarter ending
November 28, 2008 and Mr Rajaratnam used this information selling 150,000 shares
on October 24,2008.
Q3.What would be the reasons behind
Gupta’s action of providing illicit
information which compromised his
reputation and integrity?
 He argued as he has no incentive to help Rajaratnam since
he was involved with dispute over losses

 He was critically defense against allegation and has

engaged in insider trading gupta lawyers pointed out did not
personally benefitted financially
Q4. Is Rajaratnam case the first time that
Gupta did something illegal or was it just the
first time he got caught?
It is possible that Rajaratnam case was NOT the first time that Gupta did
something illegal to make money, but just the first time that he got caught:
 Gupta's close friend and colleague Anil Kumar had testified against him in the trial. If
the Rajaratnam case was a one-off, this would seem unlikely given their closeness
 Evidence presented at Gupta’s trial (the phone conversation between him and
Rajaratnam) proves that while he was still in McKinsey, Gupta was fully aware that
Kumar was selling insider information about McKinsey clients to Rajaratnam for
money. This is a violation of the sacrosanct McKinsey code of conduct, and, of
course, illegal
 It also came to light that while still employed at McKinsey, Gupta and Kumar set up a
consultancy firm on the side in their wives’ name, which is again a serious breach of
the McKinsey code
 During the trial, Gupta said "It's not like this is the first time I had insider
information in my life. I had been advising boards for 40 years. I had inside
information, there was never an issue". This raises the suspicion even more of him
having being involved in insider trading earlier.
Q5. Will Mr. Gupta restore his reputation and
rebuild his fortune after being restored?

He has the potential to rebuild his fortune and gradually restore back his reputation but it
will require hard work and dedicated efforts. below are the reasons for such statement
a. Challenger: Rajat Gupta comes across as an outstanding individual right from a very young
age. He seems to thrive under adversity. He lost his father at a young age and his mother
soon after, he still managed his school very well and made it to the prestigious IIT – Delhi
b. Bright and intelligent :An important characteristic for any leader to have is fortitude,
persistence, and an ability to keep going when the chips are down. We see all these traits in
Rajat Gupta, coupled with an unparalleled intellect. He made it to IIT – Delhi and then
seems to have cruised through Harvard Business School, even while being the youngest in
his class
c. Phillanthropist nature: Gupta is described by his class fellows as a nice guy, who wanted
to help others. This seems to manifest itself in later years, as he was actively involved in
major philanthropic activities
d. Hardworking :McKinsey was indeed a hard place to work and followed an up or out
policy. An employee either got promoted up or was advised to leave the firm. Rajat Gupta
thrived in this hyper-competitive environment. He seems to have done extremely well
whenever thrown a challenge.