Rajat Gupta, one of the most successful Indian Americans on Wall Street, was found guilty on Friday of passing confidential market information to Galleon hedge fund founder Raj Rajaratnam in one of America's biggest insider trading cases.
A Manhattan court held the 63-year-old former Goldman Sachs director guilty of providing insider information to his former friend, Mr. Rajaratnam, who was sentenced last year to 11 years in prison for insider trading.
Mr. Gupta was found guilty on four counts out of six charges.
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The court will pronounce the sentence on October 18.
Prosecutors had accused Mr. Gupta of providing market-moving information to Mr. Rajaratnam while serving on the board of Goldman Sachs and heading McKinsey&Co.
The high-profile trial began on May 21 this year and lasted three weeks.
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Securities fraud carries a maximum prison sentence of 20 years, while conspiracy carries a five-year maximum prison sentence.
Mr. Gupta will remain free on bail until his sentencing.
Mr. Gupta was convicted on three counts of securities fraud and one count of conspiracy for passing along confidential boardroom information about Goldman and Proctor & Gamble companies to the hedge fund that earned millions of dollars trading on his tips.
He was acquitted of two counts of securities fraud.
He was found guilty for providing information about the $5-billion investment by Warren Buffett's Berkshire Hathaway Inc., and about Goldman stock on October 24, 2008.
His wife and four daughters broke down as the jury read out the sentence, but Mr. Gupta was expressionless.
The verdict is being regarded as a major victory for U.S. prosecutors as the government seeks to stop leaking of corporate secrets to Wall Street.
“Mr. Rajat Gupta once stood at the apex of the international business community. Today, he stands convicted of securities fraud. He achieved remarkable success and stature, but he threw it all away,” said Indian-origin chief Manhattan prosecutor Preet Bharara said in a statement.
“Having fallen from respected insider to convicted inside trader, Mr Gupta has now exchanged the lofty boardroom for the prospect of a lowly jail cell,” he said.
Besides his tenure at Goldman Sachs and McKinsey, which he ran from 1994 to 2003, the Kolkata-born Gupta served on the boards of the Rockefeller Foundation and the Bill & Melinda Gates Foundation.
He is a co-founder of the Indian School of Business in Hyderabad.
Defence lawyer Gary Naftalis said he was disappointed that the jury convicted Mr. Gupta of four charges. “We continue to believe that he acted with integrity and honesty and never pocketed a dishonest dime.”