(Bloomberg News) When the U.S. Securities and Exchange Commission sued Rajat K. Gupta for insider trading yesterday, it wasn't simply accusing "a Westport, Conn.-based business consultant" of providing illegal tips to the billionaire hedge-fund manager Raj Rajaratnam.

Gupta, unlike the 26 people charged in the government's multiyear criminal insider-trading investigation that went public with Rajaratnam's arrest in October 2009, has served on the boards of some of the largest multinationals, including Goldman Sachs Group Inc. and Procter & Gamble Co. From 1994 to 2003, he ran McKinsey & Co., the global consulting firm that has plotted strategy for companies such as General Electric Co. and AT&T Inc. Gupta remained a senior McKinsey partner until 2007.

"McKinsey is the closest thing the business world has to a confessional, and he was the high priest," said Terry Connelly, dean of the Ageno School of Business at Golden Gate University in San Francisco, and a former managing director at Salomon Brothers. "They have been an icon in the consulting business almost since they were founded."

Gupta, 62, is the only member of the Bill & Melinda Gates Foundation's Global Development Program Advisory Panel who has not led a country or at least worked directly for its president or administration, according to foundation biographies. He chairs the panel.

The panel "provides strategic guidance and does not have any financial, fiduciary or audit responsibilities," the Seattle-based foundation said in a statement. "Rajat is a valued member of the panel and will continue to serve on it."

Initial Harvard Rejection

Gupta has served on advisory boards at Northwestern University's Kellogg School of Management, University of Pennsylvania's Wharton School, Massachusetts Institute of Technology's Sloan School of Management and Harvard Business School, his alma mater. He went from Harvard to McKinsey, though was rejected after his first application to the consulting firm. He was reconsidered after a recommendation from professor Walter J. Salmon.

"I can only say that he was an outstanding student, and as far as I could tell in my exposure to him in those years an outstanding person," Salmon said yesterday.

In 2008 and 2009, after stepping down from McKinsey, Gupta passed confidential information to Rajaratnam, founder of New York-based Galleon Group LLC, including early word on quarterly earnings at Goldman Sachs and P&G, according to the SEC's civil suit. Gupta called Rajaratnam 23 seconds after an October 2008 Goldman Sachs board call during which senior executives informed the board of poor results by the bank, the SEC said.

$18 Million

A month earlier, he disclosed information to Rajaratnam on the $5 billion investment in Goldman Sachs from Warren Buffett's Berkshire Hathaway Inc., according to the lawsuit.

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