Former Goldman, Sachs Board member Rajat K. Gupta's criminal trial begins today . He has been charged with divulging confidential, inside information to those who traded on it and profited . Alleged recipients of this "illegal information " include Raj Rajaratnam and others. The big question is , did Gupta benefit financially directly or indirectly from his communication of alleged confidential information ? Did he curry favors? Receive inside information in return? Cash? Gifts ? Or nothing at all ? That will be be the most difficult prong of the Prosecution case to prove .
But all this leads to an even bigger question . With the 66 prosecutions, pleas, convictions, publicity and tens of millions of dollars spent by the Government, is all this really any kind of deterrent to the improper use of inside information that is passed each and every day by those on Wall Street? Unfortunately, I think the practice is too rampant, too ingrained in "Worldwide Wall Street Culture " and moreover the regulatory-enforcement agencies are outnumbered, understaffed and inadequately funded to tackle this way of life.
The one practice which might lessen is talking about " things " on the phone . Insider Trading unfortunately is here to stay! Your thoughts?
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