Bloomberg News

Gupta Trial Postponed Indefinitely in SEC Insider Trading Case

June 30, 2011

June 30 (Bloomberg) -- A U.S. Securities and Exchange Commission judge postponed a hearing for Rajat Gupta, the former Goldman Sachs Group Inc. director scheduled to face accusations that he leaked inside information about the company.

Chief Administrative Law Judge Brenda P. Murray granted a six-month stay of the proceeding, which was scheduled for July 18, according to a June 20 order posted on the SEC’s website. The SEC said elsewhere on its website that the hearing had been “postponed indefinitely.”

Gupta, 62, was accused by the SEC in March of having passed confidential information to Galleon Group founder Raj Rajaratnam in 2008 about Berkshire Hathaway’s $5 billion investment in Goldman Sachs. Rajaratnam, who was convicted May 11 of directing an insider-trading ring, faces almost 20 years in prison at his July 29 sentencing. Gupta, a former McKinsey & Co. managing partner, isn’t facing criminal charges.

Rather than pursuing claims against Gupta in federal court, the SEC filed an administrative proceeding, which is heard by a judge employed by the agency. Gupta, who has denied the claims, sued the SEC in March, saying the administrative action would deny him the right to a jury trial.

A phone call to Gupta’s attorney Gary Naftalis wasn’t immediately returned. In the March lawsuit, Naftalis said “Gupta denies all allegations of wrongdoing and stands ready to mount a defense against each and every one of the commission’s charges.”

John Nester, an SEC spokesman, declined to comment.

--Editors: Gregory Mott, Lawrence Roberts

To contact the reporter on this story: Joshua Gallu in Washington at jgallu@bloomberg.net

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net


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