UNITED STATES ATTORNEY’S OFFICE
Southern District of New York
U.S. ATTORNEY PREET BHARARA
Thursday, July 19, 2012 Jennifer Queliz
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ANIL KUMAR, a former senior partner at McKinsey & Company
(“McKinsey”), was sentenced today to two years of probation and ordered to forfeit $2,260,000 for his participation in an insider trading scheme in which he provided material, nonpublic information (“Inside Information”) stolen from McKinsey and its clients to Raj Rajaratnam, the head of Galleon Group (“Galleon”), who then traded based, in part, on the Inside Information.
KUMAR pled guilty in January 2010 to one count of conspiracy to commit securities fraud and one count of securities fraud. He was sentenced today in Manhattan federal court by U.S. Circuit Judge Denny Chin.
According to the Information, statements made during KUMAR’s guilty plea proceeding, and KUMAR’s testimony during the criminal trials of Rajaratnam and Rajat Gupta, the former Chairman of McKinsey and former member of the Board of Directors of Goldman Sachs and Procter & Gamble:
From 2004 through 2009, KUMAR provided Inside Information relating to corporate transactions, revenue, and other financial information of McKinsey’s clients to Rajaratnam in anticipation that Rajaratnam would trade based, in part, on that information. Upon receipt of the Inside Information from KUMAR, Rajaratnam executed and caused others to execute securities trades. In return for the Inside Information, Rajaratnam paid KUMAR nearly $2 million. By providing the Inside Information to Rajaratnam, KUMAR violated his fiduciary and other duties of confidentiality to McKinsey and its clients.
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In addition to the probation and forfeiture, Judge Chin ordered KUMAR, 53, of Saratoga, California, to pay a $25,000 fine and a $200 special assessment fee.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being handled by the Office’s Securities and Commodities Task Force.
Assistant U.S. Attorneys Reed Brodsky and Richard Tarlowe are in charge of the prosecution.