Ex-Goldman Honcho Guilty of Fraud

A former Goldman Sachs director accused of feeding confidential information to a corrupt hedge fund manager has been convicted of conspiracy and three counts of securities fraud. A jury acquitted Rajat Gupta on two other securities fraud counts. Gupta's adult daughters hugged and wept as the verdict was read; he showed no visible reaction. The 63-year-old Gupta has been the most prominent defendant prosecuted so far in a wide-ranging probe of alleged insider trading in the hedge fund industry by investigators armed with wiretaps.

Both his trial and that last year of former billionaire Raj Rajaratnam pulled back the curtain on how the two longtime friends and Wall Street titans navigated the turbulent waters of the 2008 economic meltdown. A federal prosecutor argued that secret recordings of phone calls between the two men showed that Gupta was so brazen about sharing Goldman board secrets it sounded like "he was talking about what happened at a Yankee game." But the defense held that the wiretapping had only created the "illusion" that legitimate business dealings were somehow sinister. (More Rajat Gupta stories.)