Former Goldman director Gupta is convicted of insider trading

New York - Rajat K. Gupta, the retired head of the consulting firm McKinsey & Co. and a former Goldman Sachs board member, was found guilty Friday of conspiracy and securities fraud. He is the most prominent business executive convicted in a wave of prosecutions that followed the government's sweeping investigation into insider trading on Wall Street.

After a monthlong trial, a jury took only two days to deliberate before reaching a verdict. The jury found Gupta guilty of leaking confidential information about Goldman to his former friend and business associate, fallen hedge-fund titan Raj Rajaratnam, on three occasions in 2008. He was also convicted of conspiring in an insider-trading scheme with Rajaratnam.

Gupta was found not guilty of two instances of tipping Rajaratnam, including an allegation that he divulged secret news about Procter & Gamble, where he also served on the board.

"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," Preet Bharara, the U.S. attorney in Manhattan, said in a statement. "Almost two years ago, we said that insider trading is rampant, and today's conviction puts that claim into stark relief."

After the verdict was read, Gupta, 63, remained stoic, his face expressionless. Just behind Gupta, his wife, Anita, buried her head in her hands, leaning against a bench in the courtroom. His four daughters, who had squeezed into the front row of the spectators' gallery each day during the trial, loudly sobbed and consoled one another. Several jurors were crying as they left the courtroom.

Gary P. Naftalis, a lawyer for Gupta, said his client would likely appeal the verdict.

"We believe the facts of this demonstrate that Mr. Gupta is innocent and we continue to believe he is innocent of all the charges," Naftalis said. "This is only round one of this matter."

Jed S. Rakoff, the judge in the case, set sentencing for Oct. 18.