The Case Against Gupta Widens

Federal prosecutors said Thursday that they were likely to file a new indictment against Rajat K. Gupta, possibly adding new criminal charges in the insider trading case against the former head of the consulting firm McKinsey & Company.

It was “more likely than not there will be a superseding indictment” filed in the case by the end of January, Richard C. Tarlowe, an assistant US attorney, said during a pretrial hearing in Federal District Court in Manhattan.

Gupta, who sat on the boards of Procter & Gamble and Goldman Sachs, is accused of divulging confidential information about those companies to his friend Raj Rajaratnam, the convicted former hedge fund manager now serving an 11-year prison term.

The 63-year-old Gupta is fighting charges of securities fraud and conspiracy and preparing for an April 9 trial. On Thursday, he appeared in court, flanked by a team of five lawyers.

In June 2008, JM Smucker said it was acquiring Folgers Coffee from Procter & Gamble for about $3 billion. The government said previously in its indictment that the day before this announcement, Rajaratnam told a colleague that he had learned from a director of Procter & Gamble that Smucker was buying Folgers.