|Gupta was well known in the business world after 34 years at McKinsey, the elite consultancy firm [Reuters]
A former Goldman Sachs director, who also was once the global head of elite consultancy McKinsey & Co, has pleaded not guilty to charges of criminal insider trading.
Rajat Gupta had surrendered to the Federal Bureau of Investigation New York city office earlier on Tuesday, but the 62-year-old managed to get freed on $10m.
Gupta pleaded not guilty to one count of conspiracy to commit securities fraud and five counts of securities fraud, charges that carry a potential penalty of 105 years in prison.
He faces charges of cheating the markets with Raj Rajaratnam, the convicted hedge fund founder who was the probe's prime target. More than two dozen people have been convicted in the probe.
Gupta's lawyer, Gary Naftalis, would not comment late on Tuesday on possible criminal charges, but he issued a statement echoing his previous comments that Gupta committed no wrongdoing.
He called the allegations "totally baseless".
"The facts demonstrate that Mr Gupta is an innocent man and that he has always acted with honesty and integrity," he said.
"He did not trade in any securities, did not tip Mr Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo."
Rajaratnam, founder of the Galleon Group hedge fund, was convicted in May by a New York federal jury after a two-month trial.
On October 13, a judge sentenced him to 11 years in prison, the longest recorded for insider trading. Rajaratnam is under house arrest and was ordered to report to prison on November 28.
Gupta, well-known in the business world after 34 years at McKinsey, had won a seat in 2006 on the board of Goldman. He retired from McKinsey in 2007.
A native of Kolkata, India, and a graduate of the Harvard Business School, Gupta is a philanthropist, having served as a senior adviser to the Bill & Melinda Gates Foundation and as a special adviser to the UN.
Lloyd Blankfein, Goldman's chief executive officer, was called to the witness stand by the government to testify at Rajaratnam's trial in Manhattan federal court.
Blankfein told the jury that Gupta violated confidentiality at Wall Street's most powerful bank by leaking boardroom secrets.
Ellen Davis, a spokeswoman for Preet Bharara, the Manhattan US attorney whose office prosecuted Rajaratnam, declined to comment on Gupta's surrendering to authorities or any possible charges.
In August, Gupta and the US Securities and Exchange Commission agreed to drop litigation against each other arising from the Galleon investigation, which has embroiled money managers, traders and corporate executives.
The SEC had said Gupta passed illegal tips to Rajaratnam about Goldman, including a possible multibillion-dollar investment from Warren Buffett, as well as tips about Procter & Gamble Co, where Gupta was also a director.
While the SEC said in August it would dismiss its administrative proceeding against Gupta, the agency said it could still bring a case against him in a federal district court.
FBI phone taps
The investigation of Sri Lankan-born Rajaratnam was notable for the use of FBI phone taps. The inquiry embroiled several of the Galleon Group founder's South Asian friends and associates.
The Rajaratnam trial punctured McKinsey's prized reputation for closely guarding client confidentiality - Anil Kumar, a former McKinsey executive, pleaded guilty to criminal charges and testified against Rajaratnam.
At the trial, prosecutors played recordings in which Rajaratnam was heard discussing information he received from Gupta about Goldman Sachs.
In one recording dated October 24, 2008, Rajaratnam was heard calling David Lau, chief of Galleon's Singapore branch, and discussing a tip he got from a board member that Goldman was on its way to a surprise fourth-quarter loss, its first as a public company.
The call comes one day after the investment bank held a board meeting discussing the loss, prosecutors said.
"I just heard from somebody who's on the board of Goldman Sachs, they are gonna lose $2 per share," Rajaratnam was heard saying.
"So what he [the board member] was telling me was that, uh, Goldman, the quarter's pretty bad."