Rajat Gupta’s Desire for Money

Image Credit: Don Buciak II via compfight
Image Credit: Don Buciak II via compfight

Rajat Gupta was a CEO of a company called McKinsey and he was a board member of investment banker Goldman Sachs. He was seen as a very highly respected business leader. Unfortunately, in March of 2011 Rajat Gupta was charged with the largest insider trading case in the United States.  Rajat Gupta was caught for feeding felon Raj Rajaratnam inside information from the two most high boards he sat on which were Procter & Gamble and Goldman Sachs. According to Anita Raghavan “in June of 2012 Gupta was found guilty of conspiracy and securities fraud in the connection to tips about Goldman, including Warren Buffet’s $5 billion investment in the bank during the financial crisis. Gupta phoned Rajaratnam, who then brought $35 million worth of Goldman stock. Gupta was sent to prison for two years” (Raghavan).

Rajat Gupta shocking scandal broke the trust of Goldman Sachs because he was seen as a trusted advisor who was a veteran at Goldman Sachs. The value of the firm to its clients and its effectiveness as an advisor requires knowing all the secrets and keeping them close to you.

What could Goldman Sachs do differently? Goldman Sachs could have shown a much better public appearance about the situation instead they failed to explain themselves to the public. Goldman Sachs also stonewalled them when talking to the congress and the press. They also done a deter job of recruiting from the same pool of potential employees such as MBA’s from Harvard Business school. For instances, pitch for those who are willing to earn less in exchange for a purer conscience.

Indeed, Rajat Gupta did hurt his company Goldman Sachs but he did not hurt them entire. As of day it is said that Goldman Sachs is returning back on track in a matter of time.

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