by Rajat Gupta
I have also spent a considerable amount of time writing this book—a difficult, cathartic, and ultimately satisfying activity. Now that it is written, I have been asking myself, what’s next? There is no question that my fall from grace and leadership positions has severely limited my options today. I no longer have the same opportunities to make my life purposeful. But then again, other opportunities to make a contribution in a quieter, more personal way continue to present themselves. In many ways the new doors that have opened are more appropriate for my stage of life.
It is yet to become clear what will motivate me, how I can make an impact and continue to improve the lives of others, while at the same time pursuing personal growth. I have re-engaged with some of the causes I cared about—and new ones, like addressing the issues with the criminal justice system. It has been gratifying to see how ISB and PHFI have prospered in this past decade, and I have gotten involved in an informal capacity with both of these institutions I helped found. I am also very excited about working with WHEELS and WIN, two not-for-profits that are committed to solving major societal problems through technological innovation. Our initial focus has been on maternal and child health, clean potable water, and sanitation. In the US, I aspire to make a contribution to criminal justice reform, specifically focusing on reducing recidivism and making prisoners productive members of society after they complete their terms.
At the same time, I want to try something completely different, to focus inwardly. Perhaps a greater emphasis on the spiritual dimension will offer avenues for personal growth? I am at peace with my past, and the question on my mind is: How should I complete this life with tranquility and with grace?
Notes
1. Solitary
1 “Occupy Wall Street Protestors Cheer Rajat Gupta’s Arrest,” NDTV, November 30, 2011, https://www.youtube.com/watch?v=1V29X_5oEtg, accessed January 2019.
2 Special Rapporteur on Torture Tells Third Committee Use of Prolonged Solitary Confinement on Rise, Calls for Global Ban on Practice, Sixty-sixth General Assembly, 18 October 2011, https://www.un.org/press/en/2011/gashc4014.doc.htm, accessed January 2019.
3. Reluctant Resignation
1 Susan Pulliam, “Goldman Director in Probe,” Wall Street Journal, April 13, 2010, https://www.wsj.com/articles/SB10001424052702303348504575184261856306400, accessed January 2019.
2 Tara Trask and Linda Petersen, “Jurors’ Perceptions in the Economic Decline,” The Jury Expert, July 1, 2009, http://www.thejuryexpert.com/2009/07/jurors-perceptions-in-the-economic-decline/, accessed January 2019.
4. Elephant
1 Peter Lattman, “In Galleon Case, Spotlight on Rajat Gupta,” The New York Times Dealbook, April 24, 2011, https://dealbook.nytimes.com/2011/04/24/in-galleon-case-spotlight-on-rajat-gupta/, accessed January 2019.
2 United States v. Rajaratnam, 09 Cr. 1184 (RJH), Memorandum and Order, August 16, 2011, http://www.law.du.edu/documents/corporate-governance/criminal/rajaratnam/Memorandum-and-Order-US-v-Rajaratnam-S1-09-CR-1184-SD-NY-August-16-2011.pdf, accessed January 2019.
3 Andrew Ross Sorkin, “Curious Accusations in SEC’s Insider Case,” The New York Times Dealbook, March 7, 2011, https://dealbook.nytimes.com/2011/03/07/curious-accusations-in-s-e-c-s-insider-case/, accessed January 2019.
4 Robert Kolker, “The Next Best Crooks,” New York Magazine, April 10, 2011, http://nymag.com/news/business/wallstreet/preet-bharara-2011-4/, accessed January 2019.
5 Jesse Eisinger, The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives (New York: Simon & Schuster, 2017), xiv.
6 “U.S. v. Raj Rajaratnam, et al.; U.S. v. Danielle Chiesi, et al. Hedge Fund Insider Trading Takedown,” Prepared Remarks for US Attorney Preet Bharara, October 16, 2009, https://www.justice.gov/archive/usao/nys/pressreleases/October09/hedgefund/hedgefundinsidertradingremarks101609.pdf, accessed January 2019.
7 Jeffrey Toobin, “The Showman: How U.S. Attorney Preet Bharara Struck Fear into Wall Street and Albany,” New Yorker, May 9, 2015, https://www.newyorker.com/magazine/2016/05/09/the-man-who-terrifies-wall-street, accessed January 2019.
8 United States of America v. Sheldon Silver, 15-CR-93 (VEC), Memorandum, Opinion & Order, April 10, 2015, https://s3.amazonaws.com/pacer-documents/S.D.N.Y.%2015-cr-00093%20dckt%20000031_000%20filed%202015-04-10.pdf, accessed January 2019.
9 Richard Bradley, “The Power of Attorney,” Worth magazine, October 1, 2014, http://www.worth.com/the-power-of-attorney/, accessed January 2019.
10 United States v. Rajaratnam, Memorandum and Order, 8 April 20, 20119 9:35, https://www.scribd.com/document/53801060/Closing-arguments-U-S-v-Raj-Rajaratnam
5. Guilty Until Proven Innocent
1 Peter J. Henning, “The S.E.C. Under Fire,” The New York Times Dealbook, March 11, 2011, https://dealbook.nytimes.com/2011/03/11/the-s-e-c-under-fire/, accessed January 2019.
2 Rajat K. Gupta v. Securities and Exchange Commission, 11 Civ. 1900, Complaint for Declaratory and Injunctive Relief and Demand for Jury Trial.
3 Ibid., Opinion and Order, July 11, 2011
6. A Dark Diwali
1 ‘Antyeshti or Funeral Ceremony’ from the Manual of Brahmo Rituals and Devotions by Sitanath Tattwabhushan, published at https://www.thebrahmosamaj.net/liturgy/funeral.html, accessed January 2019.
2 Robert Frost, The Road Not Taken and Other Poems (Penguin Classics, 2015).
8. The Firm
1 Rabindranath Tagore, Gitanjali (New York: Dover Publications, Inc., 2000), 25.
2 N.R. Kleinfeld, “When a Business Is Beheaded,” New York Times, June 20, 1982, p. 003001.
9. Chicago
1 John A. Byrne, “The McKinsey Mystique,” BusinessWeek, September 20, 1993.
10. Unity in Diversity
1 Ronald E. Yates, “The Firm Myths Not So Firm,” Chicago Tribune, July 10, 1994.
13. Testimony
1 Press release: “Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Insider Trading Charges Against Former Corporate Chairman and Director Rajat K. Gupta,” Wednesday, October 26, 2011, https://www.justice.gov/archive/usao/nys/pressreleases/October11/guptarajatindictmentpr.pdf, accessed January 2019.
2 Ben E. White, “Buffett Deal at Goldman Seen as a Sign of Confidence,” New York Times, September 23, 2008, A1.
3 Richard Beales, “Has Warren Buffett Found a New ‘Moat’?” International Herald Tribune, September 24, 2008.
4 Suzanne Craig, “Goldman to Cut 10% of Jobs as Downsizing Wave Grows,” Wall Street Journal, October 23, 2008.
14. A Cropped Portrait
1 Dirks v. S.E.C., 463 U.S. 646 (1983).
2 Kevin Roose, “Why the Rajat Gupta Trial Is a Big Deal,” New York magazine, June 4, 2012.
15. Unsung
1 Eknath Easwaran (Trans.), The Bhagavad Gita (Nilgiri Press, 2007) 2:7, 89.
17. The Anarchy of Destiny
1 Suketu Mehta, “Exclusive: Raj Rajaratnam Reveals Why He Didn’t Take a Plea,” Newsweek, October 23, 2011, http://www.newsweek.com/exclusive-raj-rajaratnam-reveals-why-he-didnt-take-plea-68203, accessed January 2019.
2 United States v. Newman, 773 F.3d 438 (2d Cir. 2014).
3 Peter Wagner and Wendy Sawyer, “Mass Incarceration: The Whole Pie 2018,” The Prison Policy Initiative press release, March 14, 2018, https://www.prisonpolicy.org/reports/pie2018.html, accessed January 2019.
18. The Gita and the SHU
1 Swami Gambhirananda (Trans.), The Bhagavad Gita (Advaita Ashrama, 2018), 2:20.
2 Ibid., 2:47.
3 Ibid., 5:3.
4 Ibid., 2:56.
5 Ibid., 2:58.
6 Ibid., 2:38.
7 Ibid., 7:8–11.
Epilogue
1 Walter Pavlo, “Can White Collar Defendants Get a Fair Trial?,” Forbes, December 19, 2012, https://www.forbes.com/sites/walterpavlo/2012/12/19/can-white-collar-defendants-get-a-fair-trial/#5580214d590a, accessed January 2019.
Acknowledgments
If there is one thing I learned du
ring the most difficult episode of my life, it is how much I value and appreciate my family, my friends, and my colleagues. The people who supported me through the events described in this book are too many to list here, but my deepest gratitude goes out to everyone who stood by me, reached out, wrote letters to the judge, testified at or attended my trial, visited me in jail, and welcomed me with open arms since my release.
When it came to telling my story, there are a few people in particular to whom I am indebted:
Ellen Daly—without whom this book would never have been completed. She was by my side throughout the process—patient, encouraging, disciplined, and creative, with an uncanny ability to be true to my voice. She would think nothing of traveling to our home, seamlessly integrating herself into the routine of the household but ensuring that I worked hard to fully engage in writing about the difficult parts of my story. She was always empathetic but true to the facts, always flexible but firm on the deadlines. She made it easy for me to open up to her, make myself vulnerable, and be able to put my real feelings in the book. She was always on the side of simple, honest, and authentic. I am truly grateful for all her help and support and in the process am privileged to have gained a true friend. I also want to thank all my friends and colleagues who reviewed the manuscript and made comments and suggestions.
Chiki Sarkar—without whom this book would never have been started. Chiki has been much more than my publisher, firmly planting the idea of the book in my mind and relentlessly pushing me to complete. She visited me in prison, followed up immediately on my release, and enabled me in every way possible. Her dedication to publishing on an accelerated timeline, ensuring an outstanding launch, while cheerfully having her second baby is truly inspiring. I am grateful for my long association with her family and the emotional connection with her that made this project a lot more personal and fun. I’d also like to extend my thanks to the amazing team at Juggernaut, Jaishree, Disha, Natasha, and Simran.
James Levine—without whom the book would not have seen the light of day in the West. Jim has been a true believer in me and this project. Despite many initial roadblocks, he crafted an innovative publishing strategy and put together an outstanding team to execute an effective launch, including my US publisher Arthur Klebanoff at Rosetta Books, my US publicist Lisa Linden, and legal reviewer Melissa Georges. Without Jim’s unwavering support and exploring of every avenue open to us, this would never have happened. In the process I have come to admire his values and commitment to his clients, which goes well beyond the expected.
Appendix
Timeline of Key Events in Rajat Gupta’s Life
Dec 2, 1948 Born, Kolkata, India
Fall 1954 Moved to Delhi
Nov 4, 1964 Father’s death (on Diwali day)
Summer 1965 Mother diagnosed with terminal illness, aortic stenosis
Summer 1966 Graduates Modern School
Fall 1966 Begins engineering program at IIT Delhi
Feb 10, 1968 Mother’s death
Fall 1968 Meets Anita Mattoo at IIT
Spring 1971 Offered job at India Tobacco Company, place at Harvard Business School
Summer 1971 Graduates IIT
Fall 1971 Moves to US, starts MBA at Harvard Business School
Spring 1973 McKinsey job offer, New York office
Summer 1973 Graduates Harvard
Marries Anita
Fall 1973 Moves to New York, Anita starts at Columbia
Fall 1978 Daughter Geetanjali born
Summer 1981 Moves to Scandinavia
Summer 1982 Daughter Megha born
Spring 1983 Made head of McKinsey Scandinavia
Summer 1984 Elected senior partner
Summer 1985 Daughter Aditi born
Dec 1986 Elected to McKinsey board
Moves back to US, settles in Chicago
Fall 1987 Nominated for McKinsey managing director
Spring 1989 Appointed Chicago office manager
Spring 1990 Daughter Deepali born
March 1994 Elected McKinsey managing director
Summer 1995 Indian School of Business project initiated
Spring 1997 Re-elected as McKinsey managing director
Summer 1999 Moves back to East Coast
Fall 1999 First encounter with Raj Rajaratnam as donor to ISB
Spring 2000 Re-elected as McKinsey managing director
Spring 2001 Formation of American India Foundation with Bill Clinton following Gujarat earthquake
July 2001 ISB opens
Fall 2002 Founding member, Global Fund to Fight AIDS, Tuberculosis and Malaria
Summer 2003 Finishes final term as McKinsey managing director
Fall 2005 Voyager Capital Partners founded. Gupta takes a 10% passive stake, with Rajaratnam taking 80% and Ravi Trehan 10% active stakes
Nov 2006 Announces intention to retire from McKinsey one year later
Nov 2006 Joins Goldman Sachs board of directors
Early 2007 Doubles investment in Voyager, unaware at the time that Rajaratnam has withdrawn a large sum of money from the fund
Mar 12, 2007 Participates in Goldman Sachs board conference call about first-quarter earnings from the NSR offices that were located in the Galleon building
In Count 2 of the charges against Gupta, the government alleged that Galleon traded on information related to Goldman earnings before they were made public. Gupta was found not guilty on this count.
2007 Joins Procter & Gamble board of directors
Dec 2007 Retires from McKinsey
April 2008 Learns from Ravi Trehan that Rajaratnam has withdrawn $23 million from Voyager, plus $25 million in unagreed fees
May 2008 Participates in P&G board meeting during which the sale of coffee brand Folgers to the J.M. Smucker’s Co. is discussed
June 3, 2008 Galleon Trader Michael Cardillo buys 17,800 shares of the J.M. Smucker’s Co.
Gupta was not charged in relation to this incident, but it was mentioned in the indictment and given considerable attention at his trial. There was no record of a call from Gupta to Rajaratnam, only a call from an unassigned line at McKinsey to Rajaratnam’s assistant. Call records show that Gupta was on another call at the time, on his private line.
July 29, 2008 Wiretapped telephone call between Gupta and Rajaratnam in which Gupta mentions a discussion at a recent Goldman board meeting about the possibility of Goldman buying a commercial bank. Rajaratnam makes reference to his arrangement with McKinsey partner Anil Kumar.
Gupta was not charged in relation to this call, but the way it was made public was devastating to his reputation and his relationship with McKinsey. At trial, he never had the opportunity to explain the context for the call or to clarify that he did not know about or condone Rajaratnam’s arrangement with Kumar.
Summer 2008 Final closing of NSR fund
Sept 9, 2008 Resigns from the Goldman board with the intention of taking an advisory role at KKR
Sept 15, 2008 Lehman Bros bankruptcy announced. Gupta agrees to stay on the Goldman board to avoid destabilizing the bank’s image
Sept 23, 2008 Participates in Goldman Sachs board conference call concerning Berkshire Hathaway’s $5 billion investment
Following the board call, Gupta places a call to Rajaratnam about Voyager
Rajaratnam orders two of his Galleon traders to purchase a combined 350,000 Goldman shares
In Counts 3 and 4 of the charges against Gupta, the government alleged that he tipped Rajaratnam about the Buffett deal and Galleon profited. At trial, Gupta was not able to explain that his call to Rajaratnam was in pursuit of money that Rajaratnam owed to Gupta, and had nothing to do with the Buffett deal. Furthermore, the key witness he was planning to call to corroborate the actual reason for the call inexplicably backed out and refused to testify at the last minute.
Sept 24, 2008 Wiretapped phone call between Rajaratnam and Ian Horowitz, a Galleon trader, in which Rajaratnam claims to have heard from an unnamed source that “Something good migh
t happen to Goldman.”
Mid-Oct 2008 Learns that the Voyager fund has gone to zero and his $10 million investment is lost
Oct 23, 2008 The Wall Street Journal publishes an article based on leaked information claiming that Goldman is about to lay off 10 percent of its workforce
Participates in Goldman Sachs board conference call concerning the impending layoffs
Immediately after the board meeting, calls Rajaratnam about Voyager
In Count 5 of the charges against Gupta, the government alleged that he tipped Rajaratnam about Goldman’s impending losses and as a result, Galleon avoided a loss of several million dollars. At trial, Gupta was not able to explain that, again, the actual reason for his call was related to the money he had lost in the Voyager fund. Earnings were not discussed at the board meeting.
Oct 24, 2008 Wiretapped conversation between Rajaratnam and a Galleon employee in which he claims to have heard from someone at Goldman that they were going to lose $2 per share (a figure that turned out to be incorrect)
Jan 29, 2009 Participates in P&G audit committee call discussing the company’s earnings, to be released the next day
Returns a call from Rajaratnam a few hours later
In Count 6 of the charges against Gupta, the government alleged that Gupta tipped Rajaratnam about P&G earnings and as a result, Rajaratnam directed some Galleon funds to sell short approximately 180,000 shares of P&G common stock. Gupta was found not guilty on this count.
Oct 15, 2009 Rajaratnam, Kumar arrested and charged with securities fraud
Dec 2009 Gupta informed by Goldman’s internal counsel that his name has come up in relation to the Rajaratnam case
Jan 2010 Kumar pleads guilty
Feb 9, 2010 Superseding indictment filed against Rajaratnam
Apr 13, 2010 The Wall Street Journal reports that prosecutors are investigating Gupta in relation to the Rajaratnam case
May 7, 2010 Gupta does not stand for re-election to the Goldman Sachs board
