Business
Hot Topics

Rajat Gupta Penalized for $13.9 Million by SEC

clip
File photo of Rajat Gupta (Getty Images)
  • United States

    Former Goldman Sachs Group director Rajat Gupta was ordered July 17 by the U.S. Securities and Exchange Commission to pay a $13.9 million penalty and barred from ever again serving as a director of a public company.

    The penalty, which came in a civil lawsuit, follows the Indian American executive’s conviction last year on criminal conspiracy and securities-fraud charges.

    Gupta, 64, is currently free on bail pending his appeal in federal court, after being sentenced to two years in prison and ordered to pay a $5 million fine.

    Federal authorities accused him of sharing corporate secrets he learned as a member of Goldman’s board with Galleon Group hedge fund manager Raj Rajaratnam. The tips included a $5 billion investment by Warren Buffet’s Berkshire Hathaway in Goldman Sachs at the height of the financial crisis.

    “The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve,” said George S. Canellos, co-director of the SEC’s enforcement division.

    “If you abuse your position by sharing confidential information with friends and business associates in exchange for private gain, you will be prosecuted to the fullest extent by the SEC.”

    A lawyer for Gupta, former managing director of consulting firm McKinsey and Co., declined to comment, the Wall Street Journal reported July 18.

    Rajaratnam, 56, is currently serving a sentence of more than 11 years at a federal prison in Massachusetts after being convicted in 2011 of conspiracy and securities fraud.

    In June, a federal appeals court denied his appeal, which was made on the basis that aggressive wiretapping of his phone should not have been allowed in court in an insider trading case.

    Gupta’s lawyers are also arguing that the trial judge should not have allowed wiretaps of Rajaratnam’s cellphone into Gupta’s case, including two calls in which Gupta did not participate.

  • print
  • comnt
  • AddInto
  • rss

Also Read
black
Kindly Log in or Sign up before using this feature!!
RSS
Mail
Comment
Print
Share
Blogs
black
@ Copyright indiawest.com. All Rights Reserved