Rajat Gupta cultivated friendship with Raj Rajaratnam: Prosecutors

NEW YORK: US Federal prosecutors have alleged that former Goldman Sachs director Rajat Gupta "furthered" his friendship with Sri Lankan hedge fund founder Raj Rajaratnam to gain benefit in "tangible and intangible ways".

US Attorney Preet Bharara has submitted a 'Bill of Particulars' with US District Judge Jed Rakoff as well as with Gupta's lawyers that details tips Gupta passed on to the one-time billionaire Rajaratnam during 2007-2009, the period of the insider-trading conspiracy he is charged with.

The document also contains details about the additional benefits, direct or indirect, that Gupta is alleged to have accrued from the insider trading scheme.

Prosecutors allege that the benefits to Gupta of tipping Rajaratnam included that the former McKinsey head "furthered his friendship with Rajaratnam" during much of the period of the charged conspiracy.

"The benefits, direct and indirect, to Gupta of tipping Rajaratnam (and their known and unknown co-conspirators) included that Gupta cultivated and attempted to cultivate a personal and business relationship with Rajaratnam.

Gupta perceived Rajaratnam to be a billionaire and the head of a multi-billionaire dollar highly successful hedge fund with significant connections around the world.

"As a result, Gupta anticipated that a strong personal and business relationship with Rajaratnam would benefit Gupta in tangible and intangible ways," the prosecutors said in the bill of particulars.

It added that through his association with Rajaratnam, Gupta had also sought to recoup some or all of his losses from his investment in Voyager, a multi-strategy fund owned by Rajaratnam's Galleon fund. Gupta had a joint investment with Rajaratnam in the fund and had suffered losses when its value had declined.