Former Goldman Sachs Group Inc. director Rajat Gupta was sentenced to two years in prison for insider trading, marking the downfall of a man who rose to the top of corporate America after being orphaned as an 18-year-old in Kolkata.
Gupta, who ran McKinsey & Co. from 1994 to 2003, was sentenced today by U.S. District Judge Jed Rakoff in Manhattan for leaking stock tips to Galleon Group LLC co-founder Raj Rajaratnam. Gupta, 63, was convicted in June of securities fraud and conspiracy. He is set to report to prison on Jan. 8. He was also fined $5 million.
Prosecutors had sought a prison term of as long as 10 years. Gupta requested probation and community service, and his lawyer had proposed that he work with needy children in New York or the poor in Rwanda.
Gupta served on the boards of Procter & Gamble Co. and AMR Corp., won praise for his charity from Microsoft Corp. Chairman Bill Gates and former United Nations Secretary-General Kofi Annan and, as McKinsey’s youngest managing director, almost tripled firm revenue.
“Rajat Gupta has lived an exemplary life of uncommon accomplishment, compassion and generosity,” defense attorney Gary Naftalis wrote in a legal brief to Rakoff last week.
Gupta “was at the pinnacle of a profession built on protecting client confidences,” prosecutors said in reply. “Yet, time and time again, over the span of nearly two years, Gupta flouted the law and abused his position of trust.”
The case is U.S. v. Gupta, 11-cr-907, U.S. District Court, Southern District of New York (Manhattan).
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