Rajat Gupta fined USD 13.9 million for insider trading
Posted on: 08:25 PM IST Jul 18, 2013
India-born former Goldman Sachs Director Rajat Gupta, convicted of insider trading, has been ordered to pay a hefty USD 13.9 million civil penalty and permanently barred from acting as an officer or director of a public company for spilling boardroom secrets.
The order issued by Judge Jed S Rakoff of the US District Court for the Southern District of New York, imposed the penalty on Gupta on Wednesday in connection with the biggest insider trading case in the US history. 64-year-old Gupta is appealing his June, 2012, conviction in a parallel case, in which he was handed down a two-year prison term and fined USD five million.His attorney was not immediately available for comment regarding the civil penalty imposed on Wednesday. The Securities and Exchange Commission (SEC) on Wednesday obtained the USD 13.9 million penalty against Gupta for illegally tipping corporate secrets to his friend and former hedge fund manager Raj Rajaratnam. Gupta also is permanently barred from serving as an officer or director of a public company, the US regulator said.The SEC previously obtained a record USD 92.8 million penalty against Rajaratnam for prior insider trading charges. "The sanctions imposed on Thursday 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 Division of Enforcement."If you abuse your position by sharing confidential company information with friends and business associates in exchange for private gain, you will be prosecuted to the fullest extent by the SEC," Canellos said.In its complaint filed in late 2011, the SEC alleged that Gupta disclosed confidential information to Rajaratnam about Berkshire Hathaway Inc's USD 5 billion investment in Goldman Sachs as well as non-public details about Goldman Sachs' financial results for the second and fourth quarters of 2008.