Information Integrity


If there is one thing that can be learnt from the travails of Mr Rajat Gupta, it is that information is sacrosanct and should not be traded for anyone’s benefit, knowing full well that critical information will be traded. When information is shared due to the necessity of one’s job or position, it is done with complete trust and integrity and the recipients need to reciprocate the trust. When that hard-earned trust is misplaced and then misused by the recipient, then judgement of the giver and the user of the information will be called into question.

The other key learning is the deciphering of human greed. Why is it that folks who are rather well off want to make more on morsels of information that can be secured using illicit transfer of such information from the famous and powerful people, knowing that such use of information for personal gain is not only prohibited by law, but is totally immoral ?

I am not passing any opinion on the verdict of conviction by the jury in the Rajat Gupta case – the jury may or may not be right. All evidence presented in the case is circumstantial and is unlikely to hold up if the case ever makes it to the Supreme Court of the U.S.  

But the point is, should this case ever have occurred in the first place ? Why do people in high and mighty positions, sometimes misuse their positions for personal benefit ? How come a long distinguished career could just be thrown away (Mr Rajat Gupta was the global Managing Director of McKinsey) for an urge which could have been controlled by the most sober and calm individuals if only had they reflected on the repercussions of their intended actions ?

Repeated and successful prosecutions of insider trading cases on Wall Street over the past couple of years should have given a pause to any criminal conspiracy, but unfortunately the  case precedes this time period and in hindsight, I am sure that the people involved in trading of information in this case would not have dared to do things that they did in fact. Exchange of securities related information happens all the time all over the world, but such information exchange is mostly casual and based on hearsay. Sometimes it could have led to profits from trading on that information. But, in the current case which has caught the limelight given the powerful personalities involved, these folks are the originators of the actions leading to the information. So, it becomes a case of fiduciary trust and integrity.

I do not know whether the conviction will ultimately lead to a jail term for Mr Rajat Gupta. Today, there was extensive coverage of the case in The Times of India newspaper – one full page. I disagree that acts of philanthropy and good deeds should be taken into consideration while determining the outcome of the case. I also disagree to associate national or ethnic origin in any way to this case – we are seeing a case of human failure, and the ultimate determination of whether it was indeed a premeditated failure is yet to be taken by the ultimate Court of Law. So, let us not prejudge, but take in the learning from the case for our future life design, and advising the youngsters who contemplate a high-achieving life of riches in securities and banking (and for that matter, in any endeavour of life).

Cheers,

Vijay Srinivasan

16th June 2012

Mumbai

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