Administration October 26, 2011

Goldman Sachs Director Surrenders in Insider Trading Case

October 26, 2011 (PLANSPONSOR.com) - Rajat K. Gupta, the highest-ranking corporate executive to become embroiled in a push by the government to root out insider trading, has been accused of leaking confidential information while serving as a director at Goldman Sachs Group Inc. and Procter & Gamble Co.
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The Wall Street Journal reports that in a six-count indictment, federal prosecutors in Manhattan alleged that Gupta, former head of global consulting firm McKinsey & Co., leaked details about the companies’ financial condition and an investment by Warren Buffett’s Berkshire Hathway Inc. to former hedge-fund titan Raj Rajaratnam. The Galleon Group founder was sentenced earlier this month to serve 11 years in prison for insider trading, the news report said.  

Gupta surrendered to the Federal Bureau of Investigation and was charged with one count of conspiracy to commit securities fraud and five counts of securities fraud. He faces up to 20 years in prison on each fraud charge.  

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The Securities and Exchange Commission (SEC) also separately brought related civil insider-trading charges against Gupta and added additional civil allegations against Rajaratnam regarding alleged improper trades in P&G.  

The criminal charges against Gupta come amid the government’s crackdown on what it describes as rampant illegal trading on Wall Street. Since late 2009, federal prosecutors in Manhattan have charged 55 individuals with insider trading, resulting in 51 convictions or guilty pleas (see SEC Snags More in Galleon Insider Trading Scandal).  

According to the WSJ, the charges against Gupta show the government believes he provided inside information to Rajaratnam because of their friendship and business relationships rather than receiving direct payments for the information. According to the indictment, Gupta allegedly gave Rajaratnam details he had learned at Goldman board meetings in 2008 about a $5 billion investment in the bank by Buffett’s Berkshire Hathaway Inc. and about Goldman’s first ever quarterly loss as a public company. Gupta has denied previously denied those allegations.  

Gupta also allegedly leaked information about the corporate earnings of Procter & Gamble in January 2009, where he also served on the board, according to the indictment.  

McKinsey hasn’t been accused of any wrongdoing in the insider-trading matter. McKinsey couldn’t immediately be reached for comment.   

Neither Goldman nor P&G has been accused of any wrongdoing in the insider-trading matter. Both firms declined to comment to the Wall Street Journal.  

Products October 26, 2011

Security Benefit Introduces Total Interest Annuity

October 26, 2011 (PLANSPONSOR.com) - Security Benefit Corporation, a Guggenheim Partners Company, has launched the Total Interest Annuity issued by its subsidiary Security Benefit Life Insurance Company (SBL).
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Built specifically for the 403(b) market, the Total Interest Annuity can be funded with contributions up to $16,500 annually or with IRA contributions or rollovers. The initial guaranteed crediting rate, which Security Benefit expects to be highly competitive, will be reset after 12 months and every year thereafter.   

SBL hopes to incentivize clients for early saving through an attractive initial guaranteed crediting rate, boosted by a 2% bonus on all contributions or transfers in the first contract year.   

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According to the company, the Total Interest Annuity may be well suited for participants in the education arena who are conservative, have assets in retirement vehicles with significant market volatility, or are near retirement.   

Financial advisers can contact Security Benefit or a Security Benefit Regional Vice President for all related product materials, including a copy of the rates.

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