Posted by: Mark Gimein on October 26, 2011 at 1:10 PM
The world is calling for the heads of bankers, and the FBI has delivered them Rajat Gupta. He’s not precisely a banker, but Gupta did sit on the board of Goldman Sachs—a position that allegedly let him tip off hedge fund manager Raj Rajaratnam to Goldman’s share moves.
This arrest might feel like it’s coming from a very old playbook. The revelation that Chase Bank head Albert H. Wiggin shorted his own company’s stock (it wasn’t illegal then) caused a scandal after the 1929 crash. The 1987 crash brought in a famous crop of insider trading arrests, including that of Goldmanite Robert A. Freeman, which remains controversial.
This arrest and the conviction of Rajaratnam stand out amid the paucity of criminal charges against senior executives linked to the main substance of the banking crash, the millions of bad mortgages underwritten by banks, repackaged and sold off to investors. One point of comparison here is the protesters’ count of arrests at Occupy Wall Street demonstrations around the country. That now stands at 2,511.
(Photographer: Eric Piermont/AFP/Getty Images)