Former Goldman Sachs Director Convicted of Insider Trading

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Rajat Gupta leaves federal court in New York, Wednesday, Oct. 24, 2012. Left is Gupta's attorney, Gary Naftalis. (AP Photo/Craig Ruttle)

Wednesday was a big day for government prosecutors cracking down on bankers. In addition to the Bank of America lawsuit, former Goldman Sachs director Rajat K. Gupta was sentenced to two years in prison and fined $5 million for insider trading. The New York Times’ Dealbook blog wrote:

Mr. Gupta, 63, who ran the consulting firm McKinsey & Company and served as a major adviser to the philanthropic efforts of Bill Gates and Bill Clinton, is the most prominent figure to face prison in the government’s sweeping crackdown on insider trading.

Gupta tipped off his friend and associate Raj Rajaratna, a hedge fund manager, to Goldman Sachs secrets. The Wall Street Journal reports:

His tip about Berkshire Hathaway Inc.’s impending investment to shore up Goldman during the crisis was “disgusting in its implications” and “a terrible breach of trust,” said [U.S. District Judge Jed] Rakoff before he handed down the sentence. He added: “Others similarly situated to the defendant must…be made to understand that when you get caught, you will go to jail.”

U.S. Attorney for the Southern District of New York Preet Bharara speaks during a news conference in February. (AP Photo/Seth Wenig)

Under Manhattan U.S. Attorney Preet Bharara, since 2009, 69 people have pleaded guilty to or been convicted of insider trading. Bharara was also the author of yesterday’s complaint filed against Bank of America.

Gupta was born in Kolkata, India, and came to the U.S. to study at Harvard Business School. The Dealbook blog writes that he is a “noted humanitarian,” and has “played a leading role in organizations fighting diseases like AIDS, malaria and tuberculosis in poverty-stricken nations.” Judge Rokoff said Gupta is “a good man,” but added “the history of this country and the world, I’m afraid, is full of examples of good men who do bad things.”

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  • Strawman411

    I am thankful for the US attorneys. Were it not for those like Preet Bharara, there would be NO banksters going down.

    They are certainly in no danger from the feds.

  • Milongaman

    Snagging a Firm capo is a big deal. Even bigger deal to put an ex-McKinsey boss away. Good choice of messenger, counselor. I’m sure it was not easy to resist the pressure. Shame you can’t get more on RICO. How about Bain and BCG?

  • Frank David Nall

    I think it is no coincidence…………that he isn’t white.

  • arsailman

    He probably made, or caused others to make $500 million, but gets fined $5million, barely a slap on the wrist. How about going after the bankers who caused the crisis in 2007-2009?????

  • interlocutor

    US Attorney = the Feds.

  • Judith

    “Good men” who do “bad things” …are NOT good men judge.

  • Strawman411

    I knew somebody would catch this huge brain fart (I had “New York State Attorney” from a related story imprinted on my “brain”). On top of which, after realizing my error, I forgot to come back and delete the comment.

    I’m blaming the presidential campaign for mass murder of my remaining brain cells.

  • Lee Merrick

    Everyone makes bad choices or can cave in to pressures, a violation of who they are “normally”. One error does not make a person “bad”. I am not saying that those who habitually do bad things should be labeled as good, but this whole idea that everyone wears either a black hat or a white hat (to borrow a movie cliche) is a fallacy. Most of us are varying shade of grey, and how we are judged is based largely on what we are being measured by.

  • interlocutor

    Heh, I can certainly relate. Counting down the seconds till Nov 7.

  • Jay kasaliwa

    Excellent job Preet Bharara! It is criminals like Rajat Gupta that think think they can get away with acts of fraud due to their position. These are the people who undermine investor confidence and destroy fairness and integrity in the marketplace. Politicians in Washington need to be regulated with the utmost of importance. Good to see our tax dollars at work..Glad to know your behind bars Gupta.You got what you deserved.Hope it was worth it.