
Rajat Gupta Convicted of Insider Trading - skbohra123
http://dealbook.nytimes.com/2012/06/15/rajat-gupta-convicted-of-insider-trading/
======
asg
Personally, 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.

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notlisted
What 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.

~~~
vecinu
I 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
The expected return from a stock, even if you're a crappy stock picker, is
greater than the expected return of a lottery ticket.

~~~
slug
How about all the stress that comes from dealing with the stock market on a
periodic basis?

~~~
tedunangst
If 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
On 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
Gupta 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
If you think a consulting company protects the confidentiality and privacy of
its clients, there's a bridge I'd like to sell you.

~~~
lancewiggs
Having 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.

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poiuyt7
It’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.

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keeptrying
I 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.

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mquander
_Mr. 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!

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Uhhrrr
The New Yorker had a (to me) fascinating article about this case a while ago:
[http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_...](http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_packer?currentPage=all)

------
11031a
Maybe I'm a skeptic but I figured he'd manage to get out of it somehow...

~~~
ChuckMcM
Well 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.

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kawera
Jail? Really? Aren't there better alternatives for cases like this?

~~~
conanite
An 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>

------
known
Legalize insider trading. With the proliferation of
internet/cellphones/print/electronic media it's impossible to prevent insider
trading.

------
huhtenberg
> _Several jurors were crying as they left the courtroom._

What's up with this?

~~~
soupboy
If 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.

~~~
joering2
Seriously 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.

~~~
soupboy
Your argument is weird. The fact that people are not just good or bad but in
between is exactly why I said the jurors felt bad giving this verdict. They
saw Gupta as someone who has been close to good most of his life (he was at
McKinsey for 40 years without a single blemish on his record!). And then you
somehow invert the your own point and say that you should not feel sorry for
Gupta because he is apparently evil like Hitler? And none of your points make
me personally feel anything good about Hitler. Compare that with Gupta's life
and tell me seriously if that is a fair comparison:

\- orphaned at 18 with very little money \- studied hard and ranked 15th in
the entire country and got admitted to IIT \- Got an MBA from Harvard \-
Worked at McKinsey till 2011 making to the the post of Managing Director (the
first MD of McKinsey from outside US) \-
[<http://en.wikipedia.org/wiki/Rajat_Gupta#Philanthropy>]

See this Bloomberg article which pretty much says something similar -
[http://www.bloomberg.com/news/2012-06-15/in-gupta-jurors-
saw...](http://www.bloomberg.com/news/2012-06-15/in-gupta-jurors-saw-american-
dream-and-convicted-anyway.html).

But I sense that we are different people, so arguing further with you will be
moot.

~~~
joering2
Too bad you giving up on arguing so quick.

Juror can say whatever they want to but the bottom line is is that when you in
front of jury, they need to judge you based on your case merits, not whether
you did or did not do something good or bad in your life. This is simple
irrelevant to case in front of the judge.

Check the case of Casey Anthony, for example. She has been giving sleeping
pills to her daughter while partying carelessly in the town. She is a bad
person and was terrible mother, but yet importunately there was not enough
evidence to sentence her. The jury judged based on evidence presented, not
because whether she was a good or bad person. And I believe its a fair system.
Otherwise one could have a spat with another and become a priest, teach and
help people for 50 years, then blew his opponent head and be found not guilty
because he did so many good things in his life. It doesnt work like that.

Whether he was orphan or not, studied to rank 15th or not is truly irrelevant.
There is hundred million people throughout the modern world history in similar
position than you never heard of (orphan, no parents, brilliant, good grades,
etc). But the big different is that Gupta is a sentenced and convicted
_criminal_ and they are not!

Further, I cannot compare Gupta's life to Hitler's, because the latter is
dead, and Gupta is "not done yet", so its like comparing apples to oranges.
But let's play this game. If we would jump into Time Machine and went back in
time before September 1939, having the same conversation you would be beaten
down by 90% of voters that were with Hitler. I don't know about you, but
surely I wouldn't like to stand against 90% of population of a country like
Germany. Probably by the end of day number 2, arguing with 90% of population
you would be hanging on the pole with hands tighten behind your back. But I
agree what happened next, that's a different story.

> But I sense that we are different people, so arguing further with you will
> be moot.

We all not that different, my friend. We all had the same grand-grand-parents.

------
known
One more scam to be added to
[https://en.wikipedia.org/wiki/List_of_scandals_in_India_%28s...](https://en.wikipedia.org/wiki/List_of_scandals_in_India_%28state_wise%29)

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mkramlich
Am 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.

~~~
Bill_Dimm
Insider 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-o...](http://nbcpolitics.msnbc.msn.com/_news/2012/04/04/11018553-obama-
signs-insider-trading-ban-into-law?lite)

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DigitalSea
Good to see scum-bags like Rajat are being put behind bars where they belong.

~~~
spydertennis
come on... this doesn't belong here.

~~~
msellout
Not 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"?

