Wednesday, October 24, 2012

Former Goldman Sachs board member jailed for two years

Rajat Gupta 

A former Goldman Sachs board member who was found guilty of four criminal counts of insider trading has sentenced to two years in jail. Rajat Gupta, 63, had leaked boardroom secrets to Raj Rajaratnam, a former hedge fund manager now serving 11 years in prison. US District Court Judge Jed Rakoff also ordered Gupta to pay a $5m fine.

Gupta said he regretted the impact of the case on his family and friends. Reading from a statement, he said: "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager." He added: I've lost my reputation I built for a lifetime. The verdict was devastating."

During the court case, which resulted in Gupta being found guilty in June, the jury heard secret recordings of conversations between him and Rajaratnam. The trial focused on a phone call made to Rajaratnam on 23 September 2008, minutes after Gupta had listened to a private conference call discussing a $5bn (£3.2bn) investment in Goldman Sachs by Warren Buffett's company Berkshire Hathaway. The deal was due to be made public after stock markets closed that day.

According to phone records, Rajaratnam bought $40m in Goldman Sachs stock moments after the phone call, earning nearly $1m. Gupta, who was born in India and educated at Harvard, also served on the boards of Procter & Gamble, the Rockefeller Foundation and the Bill and Melinda Gates Foundation.

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