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Ex-Goldman Sachs board member pleads not guilty

October 26, 2011 12:00:00 AM PDT
A former board member of Goldman Sachs and Procter & Gamble pleaded not guilty in the biggest insider trading case in history.

Rajat Gupta entered the plea to all six counts of securities fraud in an indictment unsealed on Wednesday. He was freed on $10 million bail, but conditions call for him to remain in the continental United States.

The indictment against the 62-year-old Westport, Conn. man accuses him of cheating the markets with Raj Rajaratnam, the convicted hedge fund founder who was the prime target of the investigation.

The indictment alleges that Gupta shared confidential information about both Goldman Sachs and Procter & Gamble at the height of the financial crisis from 2008 through January 2009, knowing that Rajaratnam would use the secrets to buy and sell stock ahead of public announcements.

In a release, U.S. Attorney Preet Bharara said Gupta "became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Mr. Gupta's breach of duty."

Gupta's lawyer called the allegations "totally baseless."

More than two dozen people have been convicted in the probe.

If Gupta is convicted, he faces a sentence up to 105 years in prison. A trial date was set for April 9.

The Associated Press contributed to this report.

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