Rajat Gupta Sentenced To Prison For Insider Trading
AUDIE CORNISH, HOST:
Former Goldman Sachs board member Rajat Gupta has been sentenced to two years in prison for insider trading. He's also been fined $5 million. Gupta was accused of passing on information illegally to hedge fund executive Raj Rajaratnam, who is already in prison.
NPR's Jim Zarroli joins me now from New York.
And, Jim, prosecutors had asked for a much longer sentence of 10 years. So did the judge explain how he arrived at this 24-month sentence?
JIM ZARROLI, BYLINE: Yeah, he did. This was federal Judge Jed Rakoff, and he said, you know, he talked about what had happened. He said this was an overwhelming crime, but it was also disgusting. He said this had taken place at a time when big financial institutions such as Goldman are in need of public trust. And what Gupta did was the technical equivalent of stabbing Goldman in the back.
But the judge also said he had received a lot of letters attesting to Gupta's character, to his good works. These included letters from Bill Gates, and also from the former secretary general of the United Nations, Kofi Annan. And the judge said, you know, there's no question Gupta is a good man, although he noted that the history of this country and the history of the world is full of examples of good men who do bad things. So he said he weighed all this. He weighed the good against the bad and decided on two years.
CORNISH: But remind us exactly what Gupta's role was in this insider trading case.
ZARROLI: He was really the biggest fish to be caught in the investigation. He was the former head of McKinsey and Company, also a board member - and not just at Goldman, but Procter and Gamble. Prosecutors said he knew Rajaratnam, who was the head of the Galleon Group hedge fund company. And he said Gupta would pass on things that were taking place - information about things taking place at the company. For instance, just, you know, minutes after a Goldman board meeting, he called him and said Warren Buffett was going to invest in Goldman. And this is the kind of thing that hedge fund executives like to hear about, and Rajaratnam was able to make a lot of money off it.
CORNISH: And did Gupta have anything to say at the hearing?
ZARROLI: He did. He stood up. He apologized to his family and his friends, also to the charitable institutions he founded. He said, the last 18 months have been the most challenging period of my life since the death of my parents when I was a teenager. He said he had lost the reputation he spent a lifetime building. But he also said he's come to accept the reality of his life going forward. Gupta, by the way, is planning to file an appeal against his conviction.
CORNISH: NPR's Jim Zarroli. Jim, thank you.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.