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« : 29 Сентябрь 2019, 20:33:56 »

Rajat Gupta Is Unrepentant for His Crimes

After a stint in federal prison, the former McKinsey chief and Goldman Sachs director maintains he is innocent — and is trying to repair his reputation.

By Andrew Ross Sorkin
March 22, 2019

Rajat Gupta had been moved to a larger part of the prison when he came face to face with his nemesis, Raj Rajaratnam.

Mr. Rajaratnam, a disgraced hedge fund manager, hadn’t always been Mr. Gupta’s nemesis. For a long time, they were close — so close that a jury was convinced Mr. Gupta had slipped him boardroom secrets so that Mr. Rajaratnam could trade on inside information.

Mr. Gupta — once a member of the financial elite as the head of McKinsey, a board member of Goldman Sachs and an adviser to Bill Gates — had been convicted of securities fraud in 2012 as part of Mr. Rajaratnam’s insider-trading ring. He was sentenced to two years in prison. And he had come to blame his plight on his former confidant.

Now both men were locked up in the same federal prison in Ayer, Mass., and they suddenly found themselves staring at each other.

Mr. Gupta, in his first interview since being released from prison three years ago, recalled the moment when he walked over to Mr. Rajaratnam on the prison grounds.

“I told him, ‘Raj, I am here because of you,’” Mr. Gupta told me. The men did not shake hands. “He’s not the apologizing type, so he didn’t say, ‘I’m sorry.’”

The two men strolled around the grounds. Then something weird happened.

“I forgave him,” Mr. Gupta said.

Today Mr. Gupta, a business pariah after the exposure of his stunning breach of corporate trust, not to mention his status as a convicted criminal, wants forgiveness, too — or at least to tell his side of the story.

The playbook for these sorts of attempted returns to public life is well established: Express contrition, forgive your tormentors, espouse the hard lessons learned.

That is not Mr. Gupta’s approach. He is aggressively unrepentant. He maintains he is innocent despite the jury verdict against him on three counts of securities fraud and one charge of conspiracy. (He was found not guilty on two other counts.)

Mr. Gupta’s book, “Mind Without Fear,” to be published next week, tells the story of how his career unraveled. It is a propulsive narrative filled with boldfaced names from business and politics. At times, it is a dishy score settler.

Mr. Gupta never testified at his trial, a decision he said he regretted. While he gives a full-throated self-defense in the book that is fuller than the one the jury heard, much of the outlines were already heard — and rejected — in court. The book requires the reader to suspend disbelief in the judicial system. Some readers may sympathize with him while others may find his arguments unconvincing.

Mr. Gupta recounts virtually every scene in the past decade of his life, from the moment he learned that he was under investigation (he got a phone call from the general counsel of Goldman Sachs while he was in line at airport security) to when he was released from prison.

The closest Mr. Gupta comes in the book, or in his interview with me, to acknowledging any error on his part is when he notes that he shouldn’t have trusted Mr. Rajaratnam and that he spoke a little too loosely when he discussed Goldman’s corporate secrets on a phone call that the F.B.I. secretly recorded.

Mr. Gupta, it seems, spent his time in prison trying to make the best of his circumstances — and occasionally hanging out with Mr. Rajaratnam.

“We played Scrabble in prison together. We played chess. We had breakfast together,” he told me. Most of their conversations were about “prison stuff, you know?”

“Sometimes we’d talk about Preet Bharara,” Mr. Gupta added.

Mr. Bharara was the crusading United States attorney for the Southern District of New York who prosecuted both Mr. Rajaratnam and Mr. Gupta. Mr. Rajaratnam, who was sentenced to 11 years in prison, “was obviously quite mad at him,” Mr. Gupta said.

Mr. Gupta is mad at Mr. Bharara, too. His book is filled with critical asides about Mr. Bharara and what Mr. Gupta believes was his prosecutorial overreach.

“Go after the hedge funds and their circle, play up the story in the press, and maybe no one would notice that the big banking executives were continuing to walk free,” he wrote. “That I, like many of those guys he targeted, was a fellow Indian only burnished his tough-guy aura.”

There is a reasonable argument to be made that Mr. Bharara didn’t do enough to pursue criminal cases against Wall Street executives and others responsible for causing the 2008 financial crisis. But it is pretty rich for Mr. Gupta — who spent years at the top of the Wall Street pecking order — to use that critique to cast himself as a victim.

The case against Mr. Gupta revolved around the day in the fall of 2008 when Warren Buffett agreed to make a crucial investment in Goldman Sachs, bolstering public confidence in the firm when such confidence was in dangerously short supply.

Sixteen seconds after Goldman’s board finished discussing Mr. Buffett’s soon-to-be-announced investment, Mr. Gupta called Mr. Rajaratnam. Mr. Rajaratnam then started buying Goldman shares. Explaining the well-timed purchases later in a taped phone call, he said he had heard “something good might happen to Goldman.”

Mr. Rajaratnam was never charged with crimes surrounding that Goldman trade; he was convicted of making other trades using illicit information. Unlike conventional insider tipsters, Mr. Gupta was never paid directly by Mr. Rajaratnam for spilling secrets. Instead, prosecutors told the jury, Mr. Gupta received other benefits or would in the future.

Mr. Gupta insists that the prosecution’s narrative is wrong. He says that he doesn’t remember speaking to Mr. Rajaratnam after the Goldman board meeting — maybe, he says, he spoke to his secretary — and that, if he did speak to Mr. Rajaratnam, he certainly didn’t divulge the pending Buffett news.

Now that he has served his two years in prison, Mr. Gupta wants to restart his life. He has been spending time with his family and doing some consulting work in India. He has not reconnected with many of his former friends and colleagues in the business world.

“I didn’t want to put them in a difficult position,” he said.

Mr. Gupta said he had learned some valuable lessons over the past decade: “Don’t get too attached to anything — your reputation, your accomplishments or any of it. I think about it now, what does it matter? O.K., this thing unjustly destroyed my reputation. That’s only troubling if I am so attached to my reputation.”

In the spirit of forgiveness, he said, he still has respect for Mr. Rajaratnam.

“I have to give him an extraordinary amount of credit,” Mr. Gupta told me near the end of our conversation. “Because he could have easily testified against me, made something up.”


Goldman disturbs Rajat Gupta’s post-prison calm

Ex-McKinsey managing director still has a bone to pick with Lloyd Blankfein

Sujeet Indap in New York
MARCH 24 2019

After serving two years in prison on insider trading charges, Rajat Gupta maintains he is a man at peace. But the former McKinsey managing director’s calm quickly dissipates when the conversation turns to Goldman Sachs.

Mr Gupta was convicted of passing secrets he learnt in September 2008 as a Goldman director to hedge fund manager Raj Rajaratnam, who traded on the information about Warren Buffett’s rescue investment in the bank and its earnings.

Now 70 and the author of a new memoir — Mind without Fear — Mr Gupta remains angry at Goldman and its chief executive at the time, Lloyd Blankfein. Proclaiming his innocence, Mr Gupta portrays himself as a fall guy of the financial crisis, whose travails distracted attention from the Wall Street figures who caused the meltdown and the prosecutors who failed to bring them to justice.

“My speculation, and I have no way to prove it, is that [Goldman was] currying favour with regulators and the justice department,” Mr Gupta told the Financial Times in an interview timed to coincide with the release of his book on Monday.

In Mr Gupta’s telling, he wanted to leave the Goldman board in early September 2008, but stayed to help the bank weather the financial storm and wound up watching its chief executive, Mr Blankfein, testify against him in court.

“I cannot believe that a busy CEO like Lloyd would come and spend so much time testifying and so much time preparing with the prosecution,” Mr Gupta said. “There are so many examples of where what he should have said was ‘I don’t remember, I don’t know’. Instead, what he kept saying was, ‘Oh, it’s my practice to discuss earnings’.”

Goldman said in a statement that any accusations of quid pro quo between the bank and the Department of Justice were “absurd” and that “it is common knowledge that the board regularly receives updates on earnings”.

Another target of Mr Gupta’s ire is Preet Bharara, the US attorney in Manhattan who brought charges against him. In his book, Mr Gupta wonders whether Mr Bharara, a fellow Indian immigrant, held special contempt for him because of their shared heritage, noting that he was arrested on the Diwali holiday in 2010 and was sentenced in the Dussehra holiday in 2012.

“[Mr Bharara] couldn’t do what he was put in the job to do,” Mr Gupta said. “How can you have the perpetrators of the financial crisis, which is all the banks and the housing finance companies, and he couldn’t bring one person to justice?

“I can tell you that basically the incentives are misaligned. Most prosecutors have political ambitions. They want to win at any cost . . . if an innocent person is proven not guilty or the jury say not guilty, it’s a win for the prosecutor. They shouldn’t take it as a loss. What they did [was] to spin a story which they knew was wrong.”

When asked for comment, a spokesperson for Mr Bharara referred the FT to his recent memoir, Doing Justice. There Mr Bharara wrote that accusations about hostility towards a fellow Indian were “comical” and “absurd”. He also said finding intent of wrongdoing made pursuing Wall Street executives too difficult.

Mr Gupta has warmer sentiments towards Mr Rajaratnam, who was sentenced to 11 years in prison after being convicted of 14 counts of insider trading. In his book, Mr Gupta writes that he appreciated that his former business partner, who he says cheated him in a hedge fund venture, chose not to implicate him in any wrongdoing. By coincidence, the two encountered each other at the Massachusetts prison were both were housed — and even played cards once.

Mr Gupta was released from prison in 2016. But while behind bars the 37-year veteran of McKinsey, the blue-chip consultancy, used his time in prison to study the US criminal justice system, and is now working with groups such as The Marshall Project and Rise-N-Step to reform it.

“I interviewed about 40-odd prisoners and [reviewed] their cases in depth when I was in prison, and like a typical consultant I charted out what every stage of the criminal justice system is from policing to bail, to arrest,” he said. “There are many injustices, there are many biases and the system needs significant reform”.

Mr Gupta remains proud of his work in management consulting, seeing it as distinct from the wheeling-and-dealing of Wall Street. In his book, he recalls that McKinsey declined an assignment for GE that called for him to travel to apartheid-era South Africa because it would have been difficult for him as an Indian.

However, he acknowledged that McKinsey had erred in recent years — such as in its work for the scandal-ridden South African power company Eskom and for Saudi Arabia. “I think the South African thing was not good on McKinsey’s part no matter how you couch it,” he said. “I see nothing wrong in serving Saudi Arabia, per se, but if an assignment was for political purposes I would recommend we don’t serve that.”

Mr Gupta said he was open to working for authoritarian governments, arguing that if consultants turned down such work, “we wouldn’t serve half the countries in the world. I don’t think that’s the litmus test”. In this regard, he offered qualified admiration for China, calling the creation of the Chinese middle class “the biggest contribution for uplifting humanity in this century”.

“There is no question that 500m people were lifted out of poverty by a totalitarian regime unaccountable to its people,” he said. “I come from India, the largest democracy in the world and would I trade losing that democracy and would I trade going to China? No, I wouldn’t, but that doesn’t mean that hasn’t resulted in an extraordinary benefit to humanity. I’ve met a lot of the Chinese leaders and they are extremely smart because it’s an authoritarian system. The quality of the politicians [in India] is not that high in terms of just being able to fashion development programmes, in contrast to China.”

Mr Gupta sees the US as another democracy that could do with more adept political leadership. “I think we’ve lost our moral authority for some time,” he said. “We are a democracy and many of our friends are authoritarian regimes. We sometimes say we are for promoting democracy in authoritarian regimes we don’t like but we’re not promoting democracy in authoritarian regime we do like.”

While expressing gratitude for the opportunities the US has given him and his children — “it’s a fantastic country,” he said — Mr Gupta wondered whether his adopted home was growing less meritocratic, endangering its position as “the centre of innovation of the world”.

“My generation were clearly much more successful than our parents but it’s not so clear going forward it can be,” he said. “I am very much for a system where there are incentives for hard work and you’re rewarded. But I’m also very much for a safety net and a society valuing roles and contributions. We’ve gone completely askew when we pay teachers nothing and we pay some financial analyst 10 times as much.”

Mr Gupta was less worried about what other people think of him. During his years as a consultant, he became a role model for Indians and Indian-Americans alike, reaching the top of the global business establishment. His criminal conviction tainted his legacy, but he said he had learnt to live with the consequences.

“Sometimes I think it was my destiny to be going through this, and what does reputation matter?” he said. “I didn’t do any of the things I did — starting the Indian School of Business or public health institutes or any of it — to build a reputation. Let’s say I lost the reputation. So what?

“I learnt one big lesson from all of this which was a sense of detachment. It comes from the Bhagavad Gita. Don’t be attached to material things, don’t be attached to your reputation, don’t be attached to your success. Do the right things for the right reasons and then it doesn’t matter.”


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« Ответ #1 : 02 Октябрь 2019, 09:32:30 »

Еще он книжку интересную опубликовал, где объясняет события со своей точки зрения https://www.amazon.com/Mind-Without-Fear-Rajat-Gupta/dp/0795352638

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