Ex-Goldman Sachs Director Rajat Gupta Gets Only Two-Year Prison Sentence

Ex-Goldman director Gupta gets two-year prison sentence (Reuters Oct 24, 2012):

NEW YORK – Disgraced Wall Street titan and philanthropist Rajat Gupta was sentenced to only two years in prison, a much lighter sentence than U.S. prosecutors had demanded, even though the federal judge who imposed it on Wednesday called his insider trading crimes “disgusting” and “a terrible breach of trust.”

Gupta was also ordered to pay a $5 million fine. He was convicted in Manhattan federal court last June for leaking Goldman Sachs boardroom secrets to Raj Rajaratnam, the hedge fund manager at the center of a U.S. government crackdown on insider trading over the past four years.

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Former Goldman Sachs Director Rajat Gupta Charged With Insider Trading

Rajat Gupta

Moments after hanging up, U.S. authorities claim, one Goldman director called a friend who headed a hedge fund. Within minutes, the hedge fund manager had snapped up thousands of Goldman shares, which soared after the news became public.

The episode is at the centre of explosive allegations revealed on Tuesday by the U.S. Securities and Exchange Commission accusing Rajat Gupta, a former Goldman director who previously led consulting firm McKinsey & Co., of participating in a vast illegal insider trading scheme.

Mr. Gupta allegedly passed confidential information gleaned from two board memberships – at Goldman and Procter & Gamble Co. (PG-N62.550.140.22%) – to Raj Rajaratnam, the founder of hedge fund Galleon Group, whose trial on criminal insider-trading charges is scheduled to begin next week in New York.

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