Not guilty, says Rajat Gupta to insider trading charges

Former Goldman Sachs and P&G director Rajat Gupta appeared in a US court today after being arrested and was indicted on six criminal counts on securities fraud.

Gupta, 62, is accused of sharing confidential information with hedge fund manager Raj Rajaratnam, the Sri Lanka born founder of Galleon Group. Rajaratnamand Gupta are said to be good friends whose regular business conversations included passing on illegal tips, allege the FBI and securities regulators.

Gupta surrendered before the FBI earlier in the day, made his appearance at the US Magistrate Court in New York before Judge Kevin Fox.

Following his presentment, he will be arraigned before US District Judge Jed Rakoff in the US District Court, Southern District of New York.

He is charged with one count of conspiracy to commit securities fraud and five counts of securities fraud.

He faces a maximum penalty of five years in prison on the conspiracy charge and 20 years in prison on each of the securities fraud charges. In addition, with respect to the conspiracy charge, Gupta faces a maximum fine of USD 250,000 or twice the gross gain or loss accrued from the crime.

For each of the securities fraud charges, Gupta faces a maximum fine of USD 5 million or twice the gross gain or loss derived from the crime.

Gary Naftalis, Gupta's lawyer, has said that his client is innocent. Gupta "Did not trade in any securities, did not tip Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo," Naftalis said in a statement.