Ex-Goldman director jailed for insider trading
By Sebastian Smith, AFP
October 26, 2012, 12:03 am TWN
NEW YORK -- Former Goldman Sachs board member Rajat Gupta, the biggest target of a U.S. government blitz against insider trading, was sentenced to two years prison Wednesday, far less than what prosecutors had demanded.
New York Federal Judge Jed Rakoff cited Gupta's "extraordinary" contribution to humanitarian and educational causes during his climb to the pinnacle of the U.S. business world as the reason for rejecting the 10-year sentence that prosecutors wanted.
However, he also turned down a defense request for a lesser, community service punishment that attorneys suggested could have been served helping the poor in Rwanda.
Senior executives committing insider trading "must be made to understand that when you get caught, you will go to jail," Rakoff said.
Gupta, 63, must also pay a US$5 million fine and was ordered to turn himself in on Dec. 11. The Indian-born high-flier, was solemn, but showed no emotion as he heard his fate. His wife, daughters and other members of his extended family sat behind him during the proceedings.
Gupta was convicted in June of spilling boardroom secrets to his friend Raj Rajaratnam, the former Galleon hedge fund tycoon who was sentenced last year to 11 years prison for his role at the center of an insider-trading ring.
In addition to his spot on the Goldman Sachs board, Gupta had been head of the renowned consultancy McKinsey & Co., and a director of Procter & Gamble, making him one of the most successful Indian immigrants in the United States.
With his conviction after a three-week trial, he became the biggest scalp for fellow Indian immigrant Preet Bharara, the chief Manhattan federal prosecutor who has made a name for himself with a crackdown on Rajaratnam's insider network.
Rakoff said Gupta, a major philanthropist who has been a leader in fighting malaria in Africa and in helping disadvantaged youths, "deserves credit."
The Manhattan judge noted that several jurors cried as they delivered their guilty verdict "because they recognized this was a person with some very good attributes."