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Rajat Gupta Convicted of Insider Trading
- 11031a 14y agoMaybe I'm a skeptic but I figured he'd manage to get out of it somehow...
- ChuckMcM 14y agoWell it dents the accusation that the justice system doesn't punish the 'rich.' But we'll hear further rationalizations, like "Well if he was white and rich, then he would have gotten off." but those are just rationalizations of course. I feel sorry that the guy didn't get better advice from his peers.
- JohannL 14y agouhm what? if you're looking for rationalizations, try "this means the rich get generally punished for their misdeeds". hilarious.
- huhtenberg 14y ago> Several jurors were crying as they left the courtroom. What's up with this?
- PhrosTT 14y agoI'm assuming it's because they're also punishing 4 children and a wife who were completely innocent.
- grannyg00se 14y agoIt's possible that they were completely innocent, but from the information in the article, that is not guaranteed. Any one of them may have known he was up to no good and silently accepted his actions, or perhaps even encouraged him in some way. It's nicer to think of them as being completely innocent though.
- soupboy 14y agoIf I were sending a 60+ year old man to jail for what could potentially be the rest of his life, maybe I would cry to. A thing to keep in mind is that Mr. Gupta does not come of as an 'evil' person. He has done quite a lot of good in the world too and was and probably still is one of the sharpest minds in the corporate world. Obviously he lost all respect by doing this, but that doesn't mean one does not feel bad seeing a man's reputation and life so thoroughly destroyed by his own greed.
- vecinu 14y agoI think Mr. Gupta's family was also quite hurt by this verdict.
- joering2 14y agoSeriously now? You must be living in some sort of a comic book where people are only good or bad, never inbetween. Its a common thing for people doing evil to feel bad and doing good things to make themselves feel better. Vito Corleone was named "godfather" with a good reason. And following your thinking, one can cry for Adolph Hitler, because: - he overcame chaos in Germany, restored order and enormously raised production in all fields of national economy - he politically united the German nation - he rearmed it militarily - he tried to liquidate the Treaty - he have restored the Reich and the provinces grabbed from Germany in 1919 - he had led millions of deeply unhappy Germans back into the Fatherland .. and so on. Now, would you cry for him? edit: obviously looking back in time, he turned out to be a monster, but at some point he had over 90% approval in ratings.
- damoncali 14y agoThere is a legitimate school of thought that says insider trading is not actually wrong, and should be legal. I don't subscribe to it myself, but "evil" is a very strong word, especially when followed by comparisons to genocidal dictators.
- joering2 14y agoWell, I use "evil" as Bible describes it; that is all sins are equal, so is all evil-doing.
- tptacek 14y agoHis wife and daughters were in the courtroom for the verdict, and they did not take it well. Anyone would be shaken by that.
- asg 14y agoPersonally, I think this is more about a sense of power, rather than simply 'billionaire envy'. I've seen that people at a certain level think that normal rules don't apply to them. This operates quite insidiously too, it's not always a chest thumping, fist pumping, 'I rule the world' kind of behaviour. I imagine Mr Gupta thinks of himself as a regular law abiding citizen, but didn't think there was anything wrong about him helping out a friend with his contacts. Also, I'm quite astonished by the fact that that 60 of the 66 charges have been resolved by guilty pleas or verdict. In many of these high profile cases, detractors claim 'witch hunt', and a quite often win on appeal. However, with these statistics, anyone who claims that there isn't something rotten going on is on doesn't have much to stand on. All in all however, a 63 year old man who was something of a personal icon is going to jail. Sad, particularly for his family, but count me impressed by Preet Bharara.
- notlisted 14y agoWhat a joke. I guess some of the old white people on Wall Street didn't like him taking away from their profits. Anyone who has worked on wall street knows that insider trading is common place. They may call it analysis, but the bottom line is that they trade on information that others (you and I) do not (yet) have. Even milliseconds matter. PS FTR: I'm old, and white.
- demet8 14y agoI totally agree with your statement.
- vecinu 14y agoI keep telling folks that invest in the stock market that they're playing a game...their game. I find that gambling in stocks is more dangerous than playing the lottery once a week. Some will argue with me and tell me that 'if you work hard and study the market, you will know how to play stocks' but my question to them is why are they reading this post?
- tedunangst 14y agoThe expected return from a stock, even if you're a crappy stock picker, is greater than the expected return of a lottery ticket.
- slug 14y agoHow about all the stress that comes from dealing with the stock market on a periodic basis?
- tedunangst 14y agoIf you're investing according to general guidelines, like investing a fixed amount each month, keeping it in, not trying to time the market, and so forth, there's very little stress. The more your investing strategy resembles gambling, the more stressful it will be.
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- hkmurakami 14y agoOn Bloomberg News, Gupta's time with Goldman Sachs was emphasized over his time at McKinsey. On NPR, they didn't even mention his role at McKinsey. On NYT (this article), they stress Gupta's time at McKinsey over his time at GS. I wonder what kind of biases or vested interests (perhaps) we can infer from this. (Or perhaps I'm overthinking this)
- kanamekun 14y agoGupta retired from McKinsey in 2007 and then leaked secrets from Goldman's board in 2008... and that's what he was prosecuted for. So it does make sense that his association with Goldman would get primary billing. As the NYT article states, "Mr. Gupta’s illegal conduct started after he retired from McKinsey." At the same time, it's definitely of note that Gupta not only headed up McKinsey but that he violated its core principle of client confidentiality: << “McKinsey’s core business principle is to guard the confidential and private information of its clients,” said a former McKinsey executive who spoke only on the condition of anonymity. “It is mind-blowing that the guy who ran the firm for so many years could be going to jail for violating that principle.” >> So I can see why both associations would be worth noting. I don't think there's a major bias or vested interest here.
- arjunnarayan 14y agoIf you think a consulting company protects the confidentiality and privacy of its clients, there's a bridge I'd like to sell you.
- lancewiggs 14y agoHaving worked there - yes the culture of keeping confidentiality was incredibly strong. We shared learnings but not details, and everything shared would be disguised. Even today, 11 years later, you won't catch me saying former client names.
- damoncali 14y agoMcKinsey’s core business principle is to guard the confidential and private information of its clients This made me spit coffee on my keyboard.
- deleted 14y ago[deleted]
- kawera 14y agoJail? Really? Aren't there better alternatives for cases like this?
- tedunangst 14y agoLike give the money back? To who? You're also creating a perverse incentive. Steal and not get caught, keep the money. Steal and get caught, give it back. Heads I win, tails you lose. You could fine him treble damages or something, but if most of his income derived from insider trading, there's no way to apply the penalty.
- conanite 14y agoAn alternative in which direction? Like, a nice hotel ... or hanging? Insider trading is basically theft, only with no specific victim, and no broken windows; a very clean crime. Insider trading is stealing from other shareholders, which might include pension funds of HN readers. Some discussion of impacts of insider trading here - http://money.howstuffworks.com/insider-trading3.htm http://money.howstuffworks.com/insider-trading3.htm
- rayiner 14y agoIt's a great punishment. Fines don't hurt the rich. They can afford to pay. Taking away their dignity, now that creates real deterrence.
- DigitalSea 14y agoGood to see scum-bags like Rajat are being put behind bars where they belong.
- spydertennis 14y agocome on... this doesn't belong here.
- msellout 14y agoNot that I'd be so aggressive, but why does that not belong here? Is it wrong to suggest that a criminal is a "scum-bag"?
- keeptrying 14y agoI think you'd find the conversations of every board member right after a board meeting at a high profile bank very very interesting. I think Rajat just had the friend who got caught or he might not have realized (unlikely) what Ratnam was doing with the information or he thought he'd never get caught because its pretty normal behavior on wall street. I'd bet its the latter. Insider trading is much more prevalent than people think.
- mkramlich 14y agoAm I the only one that thinks that "insider trading" is pretty much how most of Wall Street & Washington DC works, period? Lots of "tips" passed around, favoritism, loose talk, secret undocumented deals and promises, shell games, front running, nepotism, kickbacks, non-monetary compensation & bribes, etc. This is probably just one particular cockroach that happened to get seen when the lights in the kitchen were turned on one night. But there's hundreds more back under the appliances and in the walls you didn't see.
- veyron 14y agoGupta and Rajaratnam are the ones that were chosen to fall. The crimes are perpetrated on a daily basis by a whole slew of individuals and firms, but someone had to walk the plank to create the illusion that something is being done.
- Bill_Dimm 14y agoInsider trading in Washington has been so accepted that it wasn't even illegal until a couple of months ago: http://nbcpolitics.msnbc.msn.com/_news/2012/04/04/11018553-obama-signs-insider-trading-ban-into-law?lite http://nbcpolitics.msnbc.msn.com/_news/2012/04/04/11018553-o...
- poiuyt7 14y agoIt’s likely that the verdict is right and Mr.Gupta is guilty. However, I get the sense that he is caught because he is an outsider playing an insider game. The “old boys” club of White hedge fund guys who do this on a regular basis are protected enough to evade this fate. Preet Bahrara (being Brown himself) finds it easier to go after the Indian guys than high powered White financiers. Will be great to see this proven wrong and White (All) crooks paying the price. Right now these guys are the white collar criminal equivalent of Blacks for lower level criminal activity – over represented due to race bias.
- mquander 14y agoMr. Gupta’s friends adamantly dispute the notion that he was driven by material gain. At the trial, his private banker at JPMorgan Chase pegged his family’s net worth at $130 million, in addition to his home in Westport, Conn., a waterfront mansion once owned by the retail executive J. C. Penney. “I don’t know who came up with this business that Rajat had billionaire envy,” said Anil Sood, a childhood friend from India who now lives in Virginia. “He has always been quite content with his wealth.” Net worth of only $130,000,000? No, clearly this man has never been driven by material gain!
- Uhhrrr 14y agoThe New Yorker had a (to me) fascinating article about this case a while ago: http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_packer?currentPage=all http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_...
- known 14y agoOne more scam to be added to https://en.wikipedia.org/wiki/List_of_scandals_in_India_%28state_wise%29 https://en.wikipedia.org/wiki/List_of_scandals_in_India_%28s...
- known 14y agoLegalize insider trading. With the proliferation of internet/cellphones/print/electronic media it's impossible to prevent insider trading.