1. Rajat K. Gupta, Insider Trading MAX ANDREWS

2. Background  Born in Kolkata, India  Father died when he was age 16  Mother died at age 18  Attended Modern School in New Delhi  Ranked 15 th in the nation in the entrance exam for IIT  Obtained his Bachelors degree in mechanical engineering from Indian Institute of technology, Delhi in 1971  Received an MBA from Harvard Business School in 1973

3. Insider Trading  The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.  Insider trading is illegal because it’s a form of securities fraud, and fraud is viewed as larceny or theft  Insider trading is not a victimless crime. All stakeholders are effected.

4. Goldman Sachs and McKinsey & Company Goldman Sachs  Multinational investment banking firm.  Provide investment banking, securities, investment management and financial services.  Also provides merger, acquisition and asset management advice.  Executives are exposed to very sensitive information McKinsey & Company  Global management consulting firm.  Solves issues regarding concerns to senior management.  Serves as an adviser to major businesses, government and institutions worldwide.  Provides companies with advise that can be considered very important information.

5. Raj Rajaratnam  Sri Lankan-American former hedge fund manager and founder of Galleon Group.  Rajat Gupta allegedly told Raj Rajaratnam about a five billion dollar purchase by Warren Buffet’s Berkshire Hathaway of Goldman preferred stock.  Raj Rajaratnam conspired to obtain the information through Rajat Gupta before it went public.  Raj Rajaratnam was reported to have wanted to cooperate with law enforcement by wearing a wire to tape insider information discussions with Gupta.  All the evidence against Rajat Gupta was circumstantial.

6. How is this Insider Trading?  The Goldman Sachs director was claimed to have been the leader in leaking out the bank’s boardroom secrets to Raj Rakaratnam.  Gupta was the most prominent corporate executive in this case which led to 79 convictions and not a single loss.  Raj Rajaratnam reportedly made approximately $60 million dollars on insider information.  This leaves a permanent scar on Raj K. Gupta’s reputation and also hurts Goldman Sach’s credibility as an investment bank.

7. How to avoid insider trading  Watch what kinds of questions you ask when receiving information on securities.  Always check your sources.  Report to the proper authorities when you receive information relevant to your portfolio that you’re not sure is public.  If you are hearing information you shouldn’t be hearing, report it because you could be charged with conspiracy.  Make sure you only trade with people who are clear on insider trading policies.  Watch how you repay favors.

8. Citations  "What Is Insider Trading and How to Avoid It – Definition, Laws & Cases." Money Crashers. SparkCharge Media, 1 Jan. 2014. Web. 28 Apr. 2014..  Protess, Ben. "Federal Court Rejects Gupta’s Appeal for New Trial." New York Times. N.p., 25 Mar. 2014. Web. 28 Apr. 2014..