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Journalism of Courage
Former Goldman Sachs Group director Rajat Gupta was ordered to pay a $13.9 million civil penalty and banned from serving as an officer or director of a public company for having illegally passed corporate secrets to former hedge fund manager Raj Rajaratnam,a top US regulator said on Wednesday.
The US Securities and Exchange Commission (SEC) said the order was issued earlier on Wednesday by US District Judge Jed Rakoff,who also oversaw Guptas related criminal trial.
Gupta,64,is appealing his June 2012 conviction and two-year prison term for having fed confidential tips he learned at Goldman board meetings in the second half of 2008 to Rajaratnam,a former billionaire who ran Galleon Group. The tips included news about Goldmans financial results and a crucial $5 billion investment during the financial crisis by Berkshire Hathaway Inc.
Gupta is a former global managing director of the consulting from McKinsey & Co. He remains free during his appeal. The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve, George Canellos,co-director of the SECs enforcement division,said. A copy of Rakoffs order was not immediately available.
Rajaratnam,serving an 11-year prison term,was the highest-ranking financial executive convicted in a multi-year federal crackdown on insider trading.
