The Raj Rajaratnam/Galleon Group, Anil Kumar, and Rajat Gupta insider trading cases are parallel and related civil and criminal actions. About the book: https://www.amazon.com/gp/product/1455504017/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1455504017&linkCode=as2&tag=tra0c7-20&linkId=863ff95b0c8a0ef4fe9f88ab52ac78bf
They were carried out by the United States Securities and Exchange Commission and the United States Department of Justice against three friends and business partners: Galleon hedge fund founder-owner Raj Rajaratnam and former McKinsey & Company senior executives Anil Kumar and Rajat Gupta. In these proceedings, the men were confronted with insider trading charges: Rajaratnam was convicted, Kumar pleaded guilty and testified as key witness in the criminal trials of Rajaratnam and Gupta, and Gupta was convicted in Federal district court in Manhattan in June 2012.
On October 16, 2009, defendants Raj Rajaratnam and Anil Kumar were arrested and indicted for insider trading and conspiracy. The charges stemmed from an investigation by the United States Attorney's Office into allegations that Rajaratnam conspired in insider trading of stock for several large companies. Rajaratnam was found guilty on all 14 charges and sentenced to 11 years in prison for profiting from tips he received from Robert Moffat, Anil Kumar, Rajiv Goel, and Roomy Khan. Chiesi[clarification needed] was sentenced to 30 months in prison with 2 years of supervised release.
During the discovery phase of the criminal trial, the USAO turned over to the defendants the contents of 18,150 wiretapped communications involving 550 different people, which were recorded over the course of sixteen months from ten telephones, including home, office and mobile lines belonging to the defendants.
Kumar maintained a low profile outside McKinsey until an October 2009 arrest in conjunction with an ongoing and wide-ranging US governmental investigation into insider trading. Former mentor Rajat Gupta was later arrested by the FBI in a related case, prompting inquiries into McKinsey's senior leadership and business model.
As of December 2009, Kumar was no longer at the consultancy. In January 2010 he pleaded guilty to insider trading charges and was the government's star witness in March 2011 in U.S. v Rajaratnam against his billionaire friend and Galleon Group founder Raj Rajaratnam. In the sprawling case his involvement was unusual; according to a Reuters blog, "He's the only informant who could be considered even more successful than Raj was, at least professionally if not in terms of raw cash. Raj had money, more money than he really knew what to do with, but Kumar had much more societal acceptance and prestige." He settled with the SEC in May 2010 for $2.8 million, the amount after gains he received from Rajaratnam through a Swiss bank account in a domestic worker's name. Gupta, Rajaratnam, and Kumar were all close friends and had founded the $1.3-billion private equity firm New Silk Route together, though Rajaratnam and Kumar withdrew before the firm began operation.
On October 26, 2011 the United States Attorney's Office filed charges against Rajat Gupta. He was arrested in New York City by the FBI and pleaded not guilty. He was released on $10 million bail (secured by his Connecticut house) on the same day. Gupta's lawyer wrote in an e-mail quoted in Bloomberg, "Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless .... He did not trade in any securities, did not tip Mr. Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo." "The tips generated 'illicit profits and loss avoidance' of more than $23 million, the [SEC] alleged in [the] lawsuit. 'Rajat Gupta was entrusted by some of the premier institutions of American business to sit inside their boardrooms, among their executives and directors, and receive their confidential information so that he could give advice and counsel,' said Manhattan U.S. Attorney Preet Bharara, whose office is prosecuting the case."