Indian-American scribe writes book on US insider trading case

Itrsquos a story that has all the elements of a cinematic thriller set in New York the biggest insider trading case in recent times involving the IndianAmerican lion of the corporate world former McKinsey chief and Goldman Sachs board member Rajat Gupta and the lsquoTamil Tiger of Wall Streetrsquo Raj Rajaratnam billionaire and founder of the Galleon hedge fund In 2009 Raj Rajaratnam right was arrested and indicted for insider trading and conspiracy The United States Attorneyrsquos Office filed charges against Rajat Gupta left too AFP Photos This is the backdrop of Anita Raghavanrsquos book The Billionairersquos Apprentice which puts the spotlight on Gupta as he went from being a revered icon to convicted felon As part of her research for the book Raghavan a Wall Street reporter attended the landmark trials of Gupta and Rajaratnam interviewed several key sources in the US UK and India and used the wiretaps in the trial to recreate the drama Here she speaks about why this story is so personal the possible reasons for Guptarsquos downfall and why reactions to the case were vastly different in the US and in India Apart from the trial Anita Raghavanrsquos book also discusses the rise of the IndianAmerican elite PicGlen Davis In what way does Rajat Guptarsquos story reflect upon the Indian diaspora in the US The story of Rajat Gupta and his family was the story of many Indians if not all Indians It was certainly the story of my parents my father like Gupta came to the US on a student F1 visa Some people have quibbled with the title The Rise of the IndianAmerican Elite because they ask why I did not look at some of the communityrsquos most shining figures Well Gupta was one of the most shining figures there What happened to him does not negate his journey before I had long wanted to write about the South Asian diaspora in the US in an engaging way The Rajat Gupta and Galleon cases was the perfect vehicle In The Billionairersquos Apprentice you mention that Gupta was part of the fortunate lsquotwiceblessedrsquo generation can you explain that The term lsquotwiceblessedrsquo generation is coined by academician Vijay Prashad It refers to the generation of Indians who were born after Independence and who benefitted from two of the greatest social movements in the 20th century Independence offered young Indians political freedom and many opportunities the growth of the IITs for instance allowed students to compete globally The second blessing was that the Indians who came to the US benefitted from the American civil rights struggle after which the HartCellar Act was passed in 1965 This act opened the floodgates to Asian immigration to the US Before that only 100 Indians were allowed each year into the country In 1965 with the Act immigration quotas for Indians were raised significantly As Indian immigrants entered into the workforce in the late lsquo70s and early lsquo80s some of the effects of the civil rights struggle were starting to percolate in American corporations and more doors opened to them Rajat Gupta and Raj Rajaratnam seem like opposites what drew them together In some ways itrsquos almost Shakespearean Gupta was the dignified corporate strategist Othello He was played by Rajaratnam the crude bawdy hustling hedge fund trader who could well be Iago They were contrasting personalities Gupta was the venerable statesman he kept company with the global elite heads of state philanthropists and corporate chieftains Rajaratnam probably would not have been even invited into that company He was a streetfighter a brash Wall Street trader who liked to be bawdy and colourful What brought them together was Guptarsquos desire to reinvent himself after a tumultuous time at McKinsey He saw Rajaratnam as the way to reach greater heights One wonders why would someone like Gupta who had it all wealth power and privilege risk losing it all by violating corporate ethics I was a result of several events I think what happened was that as Gupta was leaving the top job at McKinsey he felt a loss of power And that is when Rajaratnam made himself available Rajaratnam could be very charming With Roomy Khan he made himself available by offering her employment with Rajiv Goel he became a friend that Goel could turn to for career advice and he boosted Anil Kumarrsquos ego He had sensed that Gupta was not over yet Gupta wanted wanted to make a name for himself in the sphere of investingu00a0 Also another factor that played in was that Gupta had come to New York fairly late in his career he was based in Scandinavia and Chicago earlier The sense of power when you are in the heart of New York Cityrsquos corporate world is enormous Gupta was stepping down from a powerful position in New York at a time when power and wealth meant most to him In his conversations Rajaratnam refers to the lsquocampsrsquo within Wall Street Did you also notice that while reporting from New York Absolutely In the 1970s when Gupta would have started on in McKinsey there were some firms such as Morgan Stanley that were whiteshoe Protestant firms and firms like Goldman Sachs which were largely perceived as being Jewish firm so yes that certainly was in the history of Wall Street It was only in the 1980s that it started breaking down when there was a great migration of Indian immigrants who changed Wall Street In what way has this case impacted the IndianAmerican community The risk is events like these may be used by prejudicial Americans to discriminate against Indians But the IndianAmerican community in India can get beyond this and emerge stronger When my parents came to America I donrsquot think we would have had a case like this because we were not important enough to matter we werenrsquot in those boardrooms Did you see very different reactions from India and the US in how they reacted to the Gupta conviction Yes Insider trading was only fairly recently considered illegal in India so there may a perception that itrsquos not a big crime In the US most people in the corporate world know that when you sit on a corporate board you are supposed to keep the contents of those board meetings confidential While there was no wire tap to show that Gupta had called up Rajaratnam to tell him about the Warren Buffett investment in Goldman Sachs what we did have was one wire tap showing a free and easy exchange of information between Gupta a respected board member and Rajaratnam a shortterm trader whose living depended on capitalising on minutebyminute moves in the market There are also some IndianAmericans who think that Rajat Gupta was treated unfairly In both India and US Gupta was an icon But loyal as they were to Gupta many IndianAmericans found it hard to condone his discussion with Rajaratnam because they knew how the US corporate environment is Will the case deter insider trading on Wall Street Yes I think it will I can still recall the day when Rajaratnam and Anil Kumar were arrested Trading floors and corporate houses have news and business channels on big screens on 24 hours and to see the towering figures of the community being paraded in handcuffs over and over again I think that has a very sobering chilling effect on people who are watching it Was this story particularly difficult to report People were very reluctant to talk because this was a story that they didnrsquot want to tell because it would not only have a negative impact on the people involved but would cast a pall over the whole IndianAmerican communityu00a0