The Feds Nab Gupta, a Rare Wall Street Takedown

But there's still been virtually no justice for those who caused the 2008 financial meltdown.

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Rajat Gupta now belongs to a tiny minority of Wall Street executives who have actually been convicted of a crime.

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A jury found the former McKinsey & Co. CEO and Goldman Sachs board member guilty of conspiracy and securities fraud in a long-running insider trading case focusing on the hedge fund Galleon Group. Among other things, Gupta disclosed confidential information revealed at Goldman board meetings to Galleon traders, which allowed them to profit by gambling—correctly—on the direction of Goldman stock.

The Gupta conviction is the biggest win yet in a Justice Department prosecution that so far has involved charges against 66 traders, with 60 of them either pleading guilty or being convicted in court. The other big conviction was Raj Rajaratnam, a confidant of Gupta's who founded the now-defunct Galleon Group.

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These convictions, however, may be most notable for their rarity. Wall Street executives accused of wrong doing routinely wriggle off the hook. The last batch of high-profile corporate convictions came a decade ago, when executives of Enron and WorldCom were sent to jail for various types of fraud.

Meanwhile, the financial collapse of 2008 that nearly wrecked the whole economy has hardly produced any prosecutions. Angelo Mozilo, who ran the Countrywide mortgage firm that generated thousands of subprime mortgages that ultimately imploded, paid $67.5 million in fines to settle charges of fraud and insider trading. In the usual practice, however, he admitted no wrongdoing.

Other financial bigwigs, such as Chuck Prince of Citigroup, Martin Sullivan of AIG and Stanley O'Neal of Merrill Lynch presided over billions of dollars in losses that nearly wrecked their firms. Each of those firms survived thanks only to government bailouts or other types of intervention. Yet none of the leaders who led them down the drain has been charged with wrongdoing. Neither have the former heads of Bear Stearns, which disintegrated and was taken over by J.P. Morgan Chase, or Lehman Brothers, which declared bankruptcy.

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The Gupta and Rajaratnam conviction may cheer corporate-governance experts, but they seem unlikely to change the public's dim view of Wall Street. Trust in banks, which was at 60 percent in the last 1970s, bottomed out at 22 percent 2009 and has stayed there ever since.

There might be relief that a few bad apples are heading to prison, but there's skepticism about the bad apples that remain.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.