Having fallen from respected insider to convicted inside trader, Rajat Gupta has now exchanged the lofty board room for the prospect of a lowly jail cell

Rajat Gupta, former Director of Goldman Sachs and the poster boy of Indians at the Wall Street, was found guilty of illegally tipping off his friend Raj Rajaratnam of confidential market information, in one of America's biggest insider trading cases, reports PTI.

After three weeks of trial, a US court held the 63-year- old guilty of providing insider information to Galleon hedge fund founder Rajaratnam, who was sentenced last year to 11 years in prison for insider trading.

"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 board room for the prospect of a lowly jail cell," he said.

Gupta was found guilty by a federal court in Manhattan on four counts, out of six. The court will pronounce the sentence on 18th October.

The conviction marks a tragic fall for the Kolkata-born financial wizard, who rose from a modest background to become a force to reckon with at the Wall Street.

The jury, which convicted one of the most prominent Indian-Americans in the US Rajat Gupta of securities fraud, said it wanted him to walk a free man after the trial, but the evidence against him and his "need for greed" was just too "overwhelming."

Jury foreman Richard Lepkowski, 51, who read out the verdict in court said he had not wanted to convict Harvard-educated Gupta of insider trading. He said Gupta was a person who came to the US and rose through the ranks. He led a "story book life" and had full support of the family as he saw during the trial.

Gupta was convicted on three counts of securities fraud and one count of conspiracy for passing 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.

Reacting to the verdict by a 12-member jury, defence lawyer Gary Naftalis said he was disappointed that the jury convicted Gupta on four charges.

"This was only round one of the case and we would appeal if necessary," said Naftalis, adding they continued to believe that Gupta acted with integrity and honesty and never pocketed a dishonest dime.

Gupta's wife and four daughters broke down as the jury read out the sentence but Gupta was expressionless.

As the jury left the court room, Gupta hugged his family members. He did not talk to media as he walked out of the courtroom.

Naftalis said that he was "pleased" that at least Gupta was acquitted on one count of disclosing information about P&G.

The verdict is being regarded as a major victory for US prosecutors as the government drives to stop leaking of corporate secrets to Wall Street.

Gupta was found guilty for passing information about the $5 billion investment by Warren Buffett's Berkshire Hathaway Inc, and of providing information to Rajaratnam on 24 October 2008 about Goldman stock.

At the trial, Goldman Sach's chief executive Lloyd Blankfein testified that he had briefed his board members over the phone on the Buffett investment beginning at 3:15pm. Within a minute after the call with the directors concluded at 3:53pm, Rajaratnam answered a call on his private line from a McKinsey conference room being used by Gupta, according to phone records and testimony.

Rajaratnam then got off a call and hurriedly told a Galleon trader Ananth Muniyappa to buy Goldman Sachs stock, Muniyappa testified.

Galleon bought 267,000 shares. Prosecutors played a wiretapped recording of a Rajaratnam phone call from the next day.

"I got a call at 3:58, right?" Rajaratnam could be heard telling trader Ian Horowitz. "Saying something good might happen to Goldman."

Other evidence focused on Galleon's sale of 150,000 Goldman Sachs shares on 24 October 2008, when the bank was losing money while Wall Street expected a profit.

There were five security fraud charges and once conspiracy charge against him. Out of the five security fraud charges, he was found guilty on three and on the lone conspiracy charge.

FBI Assistant Director Janice K Fedarcyk said the verdict was a "milestone" in the agency's drive, initiated in 2007, against illegal conduct in the hedge fund industry.

"Rajat Gupta broke the law, plain and simple. Gupta used his exclusive access to the board room to violate his fiduciary responsibility, repeatedly sharing confidential, inside information with his friend Raj Rajaratnam," said Fedarcyk.

The high-profile trial of Gupta, who served on the board of Goldman Sachs and headed McKinsey & Co, began on 21st May and lasted for three weeks.

Securities fraud carries a maximum prison sentence of 20 years while conspiracy carries a five-year maximum prison sentence. Gupta will remain free on bail until his sentencing.

Much of the evidence against Gupta was circumstantial, including phone records that showed he promptly called Rajaratnam after receiving confidential information.

Gupta's defence, however, pointed out to the lack of direct evidence against him. They also told the court that Gupta had fallen out with Rajaratnam over a $10 million loss he incurred in investment with him.

Gupta's undoing began when his billionaire friend Raj Rajaratnam, a Sri Lankan, was charged by federal prosecutors of running of one of the biggest insider trading scams in US history.

Gupta met Galleon hedge fund founder Rajaratnam through another Indian-American McKinsey partner Anil Kumar.

Rajaratnam had made an anonymous contribution of a million dollars to the Indian School of Business, Hyderabad, which Gupta had co-founded with Kumar.

Together, they helped start New Silk Route Partners, a private equity firm focused on investments in India.

The two became friends and occasionally had lunch together, eating Indian takeout in Rajaratnam's office in Manhattan.

Rajaratnam is currently serving an 11-year prison sentence for making millions of dollars in profits and avoiding large scale losses thanks to confidential information he received.

In addition to Procter & Gamble and Goldman, Gupta was a director of the AMR Corporation, the parent company of American Airlines.

The Rockefeller Foundation appointed him a trustee; he was named an adviser to the former US President Bill Clinton and Bill Gates, Co-founder and Chairman of Microsoft, on their global health initiatives. He is also the co-founder of the Indian School of Business (ISB) in Hyderabad.

Gupta was also appointed as special advisor on management reform to then UN Secretary-General Kofi Annan. He additionally served on the UN Commission on the Private Sector and Development and was co-chairman of the United Nations Association of America.