U.S. Department of Justice

United States Attorney
Southern District of New York

Thursday, July 19, 2012

Former McKinsey Senior Partner Anil Kumar Sentenced in New York for Illegal Insider Trading

NEW YORK –Anil Kumar, a former senior partner at McKinsey & Company, was sentenced today to two years of probation and ordered to forfeit $2,260,000 for his participation in an insider trading scheme in which he provided material, nonpublic information (inside information) stolen from McKinsey and its clients to Raj Rajaratnam, the head of Galleon Group, who then traded based, in part, on the inside information, announced U.S. Attorney for the Southern District of New York Preet Bharara.  Kumar pleaded guilty in January 2010 to one count of conspiracy to commit securities fraud and one count of securities fraud.  He was sentenced today in Manhattan federal court by U.S. Circuit Judge Denny Chin.

According to the information, statements made during Kumar’s guilty plea proceeding, and Kumar’s testimony during the criminal trials of Rajaratnam and Rajat Gupta, the former Chairman of McKinsey and former member of the Board of Directors of Goldman Sachs and Procter & Gamble: 
     
From 2004 through 2009, Kumar provided inside information relating to corporate transactions, revenue and other financial information of McKinsey’s clients to Rajaratnam in anticipation that Rajaratnam would trade based, in part, on that information.  Upon receipt of the inside information from Kumar, Rajaratnam executed and caused others to execute securities trades.  In return for the inside information, Rajaratnam paid Kumar nearly $2 million.  By providing the inside information to Rajaratnam, Kumar violated his fiduciary and other duties of confidentiality to McKinsey and its clients.
          
*                *                *
     
In addition to the probation and forfeiture, Judge Chin ordered Kumar, 53, of Saratoga, Calif., to pay a $25,000 fine and a $200 special assessment fee.
  
U.S. Attorney Bharara praised the investigative work of the FBI.  He also thanked the U.S. Securities and Exchange Commission.
          
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The case is being handled by the U.S. Attorney’s Office for the Southern District of New York’s Securities and Commodities Task Force.  Assistant U.S. Attorneys Reed Brodsky and Richard Tarlowe are in charge of the prosecution.

Return to Top

GENERAL INFORMATION
About the Financial Fraud Enforcement Task Force

 Leadership
Loretta E. Lynch,
Attorney General, Chair
Sally Q. Yates,
Deputy Attorney General, Vice Chair
 Contact
Virginia Chavez Romano,
Executive Director
(202) 514-2000
Task Force Partners

Task Force Subcommittees

 

Victims' Rights

Intelligence and Resources

Enforcement

Task Force Working Groups

 

Financial Institution Fraud

Grant Fraud

Loan Fraud and Discrimination

Residential Mortgage-Backed Securities

Securities and Commodities Fraud