Rajat Gupta, the former chief of global consulting powerhouse McKinsey is expected to face criminal charges as early as Wednesday for allegedly funnelling Goldman Sachs earnings information to convicted hedge fund manager Raj Rajaratnam while he served on the investment bank’s board.
People familiar with the case say that Mr Gupta is likely to voluntarily surrender to agents of the Federal Bureau of Investigation on Wednesday before charges are announced by US prosecutors in New York.
Mr Rajaratnam forged a friendship with him after the former made a donation to the Indian School of Business which was founded by Mr Gupta. They would later go into business and start the investment firm Taj Capital later renamed New Silk route.
But while Mr Rajaratnam was convicted and sentenced to 11 years in prison for insider trading, the Securities and Exchange Commission dropped all charges against Mr Gupta even though the wiretap evidence presented at the trial appeared to implicate him.
The impending criminal charges after comes after months of speculation and an exchange of lawsuits between the SEC and Mr Gupta.
The 62-year-old Mr Gupta rose to the pinnacle at McKinsey where he became the consulting firm’s first non-American chief executive after graduating from Harvard Business School. He has also served as a senior adviser to the Bill and Melinda Gates Foundation, the United Nations and KKR the hedge fund company co-founded by industry legend Henry Kravis.