Former Goldman Sachs Board Member (and Raj Raj Pal) Charged

Remember this name: Rajat Gupta. You will be hearing it a lot more soon (as will Goldman Sachs CEO Lloyd Blankfein). For now, let's go to the SEC complaint -- which will no doubt tarnish the vampire squid's already extremely scuffed up name -- just filed against this former Goldman insider and friend of fellow alleged insider trader Raj Rajaratnam:

"The Securities and Exchange Commission today announced insider trading charges against a Westport, Conn.-based business consultant who has served on the boards of directors at Goldman Sachs and Procter & Gamble for illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms as well as an impending $5 billion investment by Berkshire Hathaway in Goldman.

"The SEC’s Division of Enforcement alleges that Rajat K. Gupta, a friend and business associate of Rajaratnam, provided him with confidential information learned during board calls and in other aspects of his duties on the Goldman and P&G boards. Rajaratnam used the inside information to trade on behalf of some of Galleon’s hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the firms. The insider trading by Rajaratnam and others generated more than $18 million in illicit profits and loss avoidance. Gupta was at the time a direct or indirect investor in at least some of these Galleon hedge funds, and had other potentially lucrative business interests with Rajaratnam."

Let the PR games at Goldman begin (yet again)!

(U.S. Securities and Exchange Commission)

(Related: Career Guide to Insider Trading, Chapter 18: To Rat or Not to Rat)