Rajat Gupta arrested, released on $10-mn bond

Former McKinsey & Co chief Rajat Gupta, who pleaded not guilty to charges of securities fraud and passing insider information to his billionaire friend Raj Rajaratnam while he was director at Goldman Sachs and Procter & Gamble, was released today on a $10 million bond.

Gupta, 62, entered his not guilty plea at a US district court today and was released after he furnished a $10 million bond, secured by his Connecticut home.

Meanwhile, Gupta appeared in US magistrate court in New York before judge Kevin Fox. This would be followed by an arraignment before US district judge Jed Rakoff in US district court, southern district of New York.

Gupta who surrendered to the FBI faces indictment on six counts on securities fraud and stands accused of sharing confidential information about investments at Goldman Sachs with hedge fund manager Raj Rajaratnam, the Sri Lanka born founder of Galleon Group.

Besides facing the charge of conspiracy to commit securities fraud he is charged on five counts of securities fraud and 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.

Gupta, who turned up at the court, dressed in a light blue shirt, has also been ordered to surrender his passport, and his travel now stands limited to the continental US.