A gripping account of the scandal that ruined hedge fund Galleon

In April 2004, Rajat Gupta gave a talk at Columbia University. One student asked the former global managing director of McKinsey & Co. for his views on money and wealth creation. “Yeah, I am driven by money....  However much you say that you will not fall into the trap of it, you do fall into the trap of it,” he said.

Those words would prove prescient. Eight years after he uttered them, Gupta was convicted by a New York court of insider trading, of leaking privileged information gleaned from his position on the board of Goldman Sachs to Raj Rajaratnam, founder of the hedge fund Galleon.

Gupta is appealing the decision, but his fall from grace is largely complete. For a man who was the first non-white, non-American to lead the world’s most famous consulting firm, how could it have come to this?

That question runs through a new book, “The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund,” published by Business Plus. It is a deeply researched, fascinating and well-written account by Anita Raghavan of the scandal that brought down Galleon.


The author, London bureau chief for Forbes magazine, provides a gripping account of a story that is Shakespearean in its drama. And she argues, persuasively, that the case is about more than criminality. It is also a study of how an immigrant community has risen to the top of U.S. society.

The book is divided into three connected narratives: the story of Gupta’s life and career; Rajaratnam’s creation of Galleon; and the building of the case against the two of them by lawyers such as Sanjay Wadhwa of the U.S. Securities and Exchange Commission and Preet Bharara at the attorney’s office for the southern district of New York.

All strands are compellingly told, but Raghavan’s effort to analyze what motivated Gupta is most striking.

The book begins in 2009, with Gupta preparing to go to President Obama’s first state dinner. The president was welcoming Manmohan Singh, prime minister of India, and the guest list included Pepsi Chief Executive Indra Nooyi and Bobby Jindal, governor of Louisiana.

Raghavan says it “served as a barometer for how far and how fast an immigrant group had risen. In one generation Indian Americans had vaulted from geeky outsiders to polished players in all facets of American society.”

Gupta was an exemplar of this ascent. Born to a far-from-affluent Bengali family, he won entrance to an Indian Institute of Technology before going to Harvard Business School, where he developed a reputation as an excellent student.

Gupta was initially rejected by McKinsey. But after one of his professors called an old classmate who ran the firm’s New York office, he was on his way. In 1994, he was appointed global managing director. Gupta expanded the number of locations from 58 to 84 worldwide, and revenue increased almost threefold.

Despite this success, he wanted more. He was thinking about his legacy and devoting time to philanthropic causes. This served to highlight the gap between him and the super wealthy who could easily sign multimillion-dollar checks for charities. “For an achievement-driven man like Gupta, it appeared that keeping up with the Rajaratnams was important. It was too hard to resist even if it meant bending the rules.”


The result: A man whose reputation had made him a beacon of the Indian American community had become the opposite. The venture capitalist Vinod Khosla worried that Gupta’s “actions had sullied the reputation” of the community.

However hard that will have been for Gupta, Raghavan believes his conviction — and that two of the most senior lawyers pursuing the case were also of Indian origin — is also a sign of just how entrenched Indian Americans, like Italian- and Irish Americans before them, have become in the national narrative.

Ravi Mattu is editor of the management section of the Financial Times of London, in which this review first appeared.