Goldman Sachs Takes Information From Its Clients And Uses It To Trade Against Them, S

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Goldman Sachs Takes Information From Its Clients And Uses It To Trade Against Them, Says Private Equity Investor http://www.businessinsider.com/goldman-sachs-trades-against-clients-2011 A private equity investor is quoted questioning the existence of a "Chinese wall" at Goldman in a new book about Goldman Sachs. Whether or not Goldman Sachs has a "Chinese Wall" barring prop traders from trading on information gleaned from the firm's client business has been questioned for some time now. (Technically, all firms that engage in both have to separate the businesses, or it's illegal.)

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Re: Goldman Sachs Takes Information From Its Clients And Uses It To Trade Against The

After a monthlong trial in Federal District Court in Manhattan, a jury took only two days to reach a verdict. It found Mr. Gupta guilty of leaking confidential information about Goldman to his former friend and business associate, Mr. Rajaratnam, on three different occasions in 2008. He was also convicted on a conspiracy charge.

“Having fallen from respected insider to convicted inside trader, Mr. Gupta has now exchanged the lofty board room for the prospect of a lowly jail cell,” Manhattan U.S. Attorney Preet Bharara said in a statement. “Violating clear and sacrosanct duties of confidentiality, Mr. Gupta illegally provided a virtual open line into the boardroom for his benefactor and business partner, Raj Rajaratnam.”

Mr. Gupta, a native of Kolkata, India, was orphaned as a teenager. After earning an engineering degree, he moved to the United States to attend Harvard Business School on a scholarship. He joined McKinsey in the early 1970s and in 1994 was elected global head, the first non-American-born executive to hold that post.