Westporter Rajat Gupta, a former Goldman Sachs Group Inc. director, was sentenced today to two years in federal prison for leaking corporate secrets about the investment bank to a hedge-fund manager. 
Rajat Gupta: gets less time than prosecutors requested. File photo
The prison term was imposed on Gupta, 63, by U.S. District Judge Jed Rakoff in Manhattan, who also ordered him to pay a $5 million fine. The sentence was far less than the eight to 10 years that prosecutors had sought. But it was more than the punishment of probation and community service that Gupta’s lawyers had requested.
The once-revered business leader became the most prominent figure caught in the push against insider trading by prosecutors and the Federal Bureau of Investigation. Gupta was ordered to report to prison on Jan. 8. He had faced a maximum sentence of 20 years for securities fraud and five years for conspiracy.
A Manhattan federal jury in June found him guilty of feeding tips about Goldman Sachs at the height of the 2008 financial crisis to hedge fund tycoon Raj Rajaratnam, his friend and business associate. (See WestportNow June 15, 2012)
In a statement read in court, Gupta said: “The last 18 months have been the most challenging period of my life since I lost my parents as a teenager.
“I regret terribly the impact of this matter on my family, my friends and the institutions that are dear to me. I’ve lost my reputation I built for a lifetime. The verdict was devastating.”
During the two-hour hearing today, the judge wrestled with the question of why Gupta, a once-respected businessman, had turned his back on an “extraordinary” and “selfless” life to commit a crime he did not profit from directly.
“I have never encountered a defendant whose past history suggests such an extraordinary devotion … to people in need,” Rakoff said. Yet Gupta’s past good deeds “starkly contrast with the nature and circumstances of his crimes.”
Gupta’s lawyer, Gary Naftalis, told the court, “The fall from grace that Mr. Gupta has suffered or experienced as a result of this matter is as steep as … I have ever seen.” He added,“This was an iconic figure who had been a role model for countless people around the globe. He is no more.”
Bill Gates, Microsoft Corp’s co-founder, and former United Nations Secretary-General Kofi Annan were among 400 friends and luminaries who had written letters to the judge urging leniency. (See WestportNow Oct. 14, 2012)
Manhattan U.S. Attorney Preet Bharara said in an emailed statement: “With today’s sentence, Rajat Gupta now must face the grave consequences of his crime—a term of imprisonment. His conduct has forever tarnished a once-sterling reputation that took years to cultivate. We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Mr. Gupta’s footsteps.”
