Official accused of insider trading off AMR board

AP News
Posted: Mar 07, 2011 9:48 PM
Official accused of insider trading off AMR board

The former Goldman Sachs director accused of insider trading has resigned from the boards of American Airlines and its parent, AMR Corp.

AMR announced the departure of Rajat K. Gupta in a regulatory filing Monday. The one-sentence filing said he had voluntarily resigned, effective immediately. He joined the boards in 2008.

Last week, the Securities and Exchange Commission filed an administrative order against Gupta accusing him of leaking inside information about Goldman Sachs to a hedge fund manager. The SEC said he told the hedge fund that Warren Buffett's Berkshire Hathaway planned to invest $5 billion in Goldman and provided details of the bank's 2008 financial results before they were made public.

The hedge fund manager, Raj Rajaratnam, has been accused in what prosecutors termed the biggest hedge fund insider trading case ever. They allege that Rajaratnam twice traded hundreds of thousands of shares of Goldman Sachs after getting tips from Gupta. Rajaratnam's trial begins Tuesday in New York.

Gupta's lawyer, Gary Naftalis, has said Gupta did nothing wrong and has a long record of ethical conduct.