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Ex-Goldman Sachs director Rajat Gupta pleads not guilty in insider trading case

October 27, 2011 - New York

Former Indian American Goldman Sachs director Rajat Gupta has pleaded not guilty to charges of securities fraud relating to a hedge fund insider trading case.

Charged with five counts of fraud and one count of conspiracy, Gupta, has been released on a 10 million dollars bail and had his passport seized, the BBC reports.

Gupta, 62, was accused of feeding Galleon Group LLC co-founder Raj Rajaratnam inside information, and was charged following a four-year securities fraud investigation of insider trading at hedge funds by the New York office of the FBI.

The prosecution said the corporate veteran was the "illegal eyes and ears" of hedge fund trader Rajaratnam.

According to the report, some phone records showed that Gupta called Rajaratnam 23 seconds after a private Goldman Sachs meeting and Rajaratnam sold his entire holding of Goldman Sachs stock, saving millions of dollars.

But correspondents said that some of the most compelling evidence against Gupta, recorded phone calls between Rajaratnam and his associates, might not be admissible in a trial.

Gupta's attorney, Gary Naftalis, recently issued a statement echoing his previous comments that Gupta committed no wrongdoing.

"Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless," his lawyer, Naftalis, said in an e-mailed statement.

"He did not trade in any securities, did not tip Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo," he added.


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