RAJAT GUPTA, the Indian-born former director of Goldman Sachs, was sentenced to two years in prison and fined $5 million for insider trading. A United States District Judge, Jed Rakoff, pronounced the judgment on the high-profile case on October 24 in a court in Manhattan. This is a crime easy to commit, hard to catch, the judge said at the sentencing. Therefore, the need for general deterrence is strong. Gupta, an Indian Institute of Technology (IIT) alumni and Harvard graduate, who made his millions on Wall Street, was initially convicted in June for leaking boardroom secrets to his business partner Raj Rajaratnam, the co-founder of the Galleon group, one of the biggest hedge funds in the U.S. Gupta had a personal stake in some of Rajaratnams other business ventures.
The prosecution conclusively proved that the tips provided by Gupta from 2007-09 had helped Rajaratnam rake in millions of dollars in profit. Gupta was on the board of corporations such as Procter and Gamble and American Airlines. Lloyd Blankfein, chairman of Goldman Sachs, told the court that Gupta appeared to have broken the banks confidentiality rules. Federal prosecutors, led by Preet Bharara, argued in court that Guptas crimes were extraordinarily serious and were particularly troubling at a time when there was widespread concern about greed, corruption and recklessness at the highest levels of the financial services industry.
In the course of his rise to riches, Gupta also gained a reputation for his philanthropic activities. Governments around the world sought his advice on various economic issues. He was like a brand ambassador for India in the U.S., moving in elite circles there. Even after his conviction, his friends stood by him. Among those calling for leniency for Gupta were Bill Gates and the former U.N. Secretary-General Kofi Annan. U.S. Federal guidelines would have allowed the judge in the case to hand him a 10-year jail term.
Most commentators had expected Gupta to receive at least a five-year jail term. Judge Rakoff had said before the sentencing that the most important criterion for him was the essential character of the defendantwhether fundamentally he was a greedy person or a good person who had departed from their better impulses.
Guptas lawyers had argued that their client had one of the best reputations on the planet. His loss of reputation is in itself a severely long punishment. The judge said Gupta had been allowed to start serving his time in prison from early January so that he could spend quality time with his family during Christmas and the New Year. Speaking to the media, Gupta said the preceding 18 months were the most challenging period of his life since he was orphaned as a teenager. Ive lost the reputation I built for a lifetime. The verdict was devastating, he said.
John CherianCOMMents
COMMents
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