Former Goldman Sachs director, Rajat Gupta, who also was once the global head of elite consultancy McKinsey & Co, will surrender to the FBI to face criminal insider trading-related charges, a person familiar with the investigation said.
Rajat Gupta, one of the most prominent business executives to be caught up in the government's wide-ranging insider-trading probe, had been named by prosecutors as an unindicted co-conspirator in the criminal case against Sri Lankan born hedge fund tycoon Raj Rajaratnam earlier this year.
The person familiar with the investigation, who declined to be identified because the charges have not yet been made public, said Gupta had agreed to surrender to authorities.
Gupta's attorney, Gary Naftalis, would not comment late Tuesday on possible criminal charges, but he issued a statement echoing his previous comments that Gupta committed no wrongdoing.
"Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless. The facts demonstrate that Mr. Gupta is an innocent man and that he has always acted with honesty and integrity. He did not trade in any securities, did not tip Mr Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo."
Rajaratnam, founder of the Galleon Group hedge fund, was convicted in May by a New York federal jury after a two-month trial.
On Oct. 13, a judge sentenced him to 11 years in prison, the longest recorded for insider trading. Rajaratnam is under house arrest and was ordered to report to prison on Nov. 28.
Gupta, 62, well-known in the business world after 34 years at McKinsey, had won a seat in 2006 on the board of Goldman. He retired from McKinsey in 2007.
Goldman Chief Executive Officer Lloyd Blankfein was called to the witness stand by the government to testify at Rajaratnam's trial in Manhattan federal court.
Blankfein told the jury that Gupta violated confidentiality at Wall Street's most powerful bank by leaking boardroom secrets.
Ellen Davis, a spokeswoman for Manhattan U.S. attorney Preet Bharara, whose office prosecuted Rajaratnam, declined to comment on Gupta's surrendering to authorities or any possible charges.
In August, Gupta and the U.S. Securities and Exchange Commission agreed to drop litigation against each other stemming from the sprawling Galleon probe, which has ensnared money managers, traders and corporate executives.
The SEC had said Gupta passed illegal tips to Rajaratnam about Goldman, including a possible multibillion dollar investment from Warren Buffett, as well as tips about Procter & Gamble Co, where Gupta was also a director.
While the SEC said in August it would dismiss its administrative proceeding against Gupta, the agency said it could still bring a case against him in a federal district court. (Reuters)