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Ex-Goldman board member Gupta convicted of insider trading

Mike Segar / Reuters

Former Goldman Sachs Group Inc board member Rajat Gupta (L) arrives at Manhattan Federal Court in New York June 14, 2012.

Rajat Gupta, a former Goldman Sachs board member, was found guilty Friday of slipping secrets about the bank to a hedge fund manager in the latest high-profile trial stemming from a broad federal probe on insider trading.

A Manhattan federal court jury, which began deliberations Thursday, convicted Gupta on four of six counts of passing confidential information to billionaire Raj Rajaratnam, manager and founder of the Galleon hedge fund. Rajaratnam, Gupta's former friend, is serving an 11-year sentence for making over $50 million on insider trading.

Gupta, who was found guilty of three counts of securities fraud and one count of conspiracy, faces a decade in prison himself. He will be sentenced later this year.

The verdict marks a stunning fall for Gupta, who is also a former top executive at business consulting firm McKinsey & Co and a former director of Procter & Gamble.

Gupta's one-time associate Rajaratnam, who was convicted of 14 counts of insider trading at a trial last year, is now serving an 11-year prison term. 

Since being implicated in the Rajaratnam case more than a year ago, Gupta has denied the charges and vowed to put on a vigorous defense. At trial, his lawyers argued that prosecutors "had no real, hard, direct evidence" against Gupta, who did not take the witness stand.

The U.S. government crackdown on insider trading has led to guilty verdicts or plea bargains of scores of executives, lawyers and financial consultants.  

Reuters contributed to this report. 

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CNBC's Bertha Coombs reports the details on the trial of former Goldman Sachs board member, Rajat Gupta, including a guilty verdict on four of six counts of criminal securities fraud. Richard Holwell, Holwell Shuster & Goldberg, weighs in.