Published October 24, 2012
NEW YORK – Fallen Wall Street insider Rajat Gupta was sentenced to two years in prison on Wednesday for leaking Goldman Sachs boardroom secrets to the hedge fund manager at the center of the U.S. government's crackdown on insider trading, a much lighter sentence than prosecutors had sought.
Gupta, 63, who also is a former global head of the McKinsey & Co management consultancy, is the most influential corporate figure to be convicted in a wide U.S. probe of insider trading involving hedge fund managers, traders, consultants and executives.
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.
The sentence was far less than the eight to ten years that prosecutors had sought, but more than the punishment of probation and community service that Gupta's lawyers had requested.
The sentence was imposed by U.S. District Judge Jed Rakoff, who questioned why Gupta had turned his back on an "extraordinary" and "selfless" life to commit a crime he did not profit from directly.
Gupta's crime was "the functional equivalent of stabbing Goldman in the back," Rakoff said. "So why did Gupta do it?"
Indian-born Gupta also once sat on the boards of Procter & Gamble Co and American Airlines. He also had advised philanthropies such as the Bill and Melinda Gates Foundation.
Rajaratnam is serving 11 years in prison, one of the longest sentences for insider trading, after his May 2011 conviction.
(Reporting by Grant McCool; editing by Martha Graybow and Matthew Lewis)