, NEW YORK, Oct 25 – Former Goldman Sachs board member Rajat Gupta, the biggest target of a US government blitz on insider trading, was sentenced to two years in prison Wednesday, far less than what prosecutors had demanded.
US District Judge Jed Rakoff in New York cited Gupta’s “extraordinary” contribution to humanitarian and educational causes during his climb to the pinnacle of the US business world as the reason for rejecting the 10-year sentence sought by prosecutors.
However, he also turned down a defense request for a lesser, community service punishment that attorneys suggested could have been carried out by 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 $5 million fine and was ordered to turn himself in on January 8. The Indian-born high-flier, whose wife, daughters and other members of his extended family sat behind him, was solemn, but showed no emotion as he heard his fate.
A few minutes earlier, he had told the court that this was “the most challenging of my life since I lost my parents as a teenager.”
“I’ve lost the reputation that I’ve built for a lifetime,” he said. “I regret terribly the impact of this matter on my family, my friends and the institutions that are dear to me.”
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 in 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 that Gupta, a major philanthropist who has been a leader in fighting malaria in Africa and in helping disadvantaged youths, “deserves credit.”