I think the Goldman Sachs thing cinched it.

Reader comment on: The Galleon Verdict

Submitted by Lyle (United States), May 13, 2011 00:52

Rajat Gupta was on the board of Goldman Sachs being an ex head of McKinsey and he appears to have called Rajaratnam right after the board meeting with the news that Buffett would invest. That at least was very clear — a board member has a significant duty to the company on whose board he sits. In that case at least there is little to argue about. So at least one action was clearly insider trading.

On a related point you might look at Business Weeks article Wall Street is Not that Guilty. Discussing the issues around the crash. I would say that a lot of wall street types were both deluded having drunk their own Kool aid and stupid, but neither is a crime. After all housing prices can never go down nationwide is a financial form of Kool-Aid. Many stories report that if some one asked about this article of faith, the folks said it could not happen and our models could not handle it anyway.

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