Business/Finance

A rich man's insider trading deserves prison

The American government wants Rajat K. Gupta to go to prison for up to a decade. He wants to go to Rwanda to do community service and call that sufficient punishment for his crimes.

A jury convicted Gupta in June of conspiracy and securities fraud for leaking Goldman Sachs boardroom secrets to billionaire hedge fund manager Raj Rajaratnam.

This was an insider trading case: Rajaratnam got the tips; Gupta provided them. Result: Because of Gupta’s tips, Rajaratnam’s hedge fund, the Galleon Group, illegally earned or avoided loss totaling $17 million, said the Securities and Exchange Commission.

Gupta awaits sentencing. But he wants to go to Rwanda to become the equivalent of a Peace Corps volunteer, albeit a very rich one. His lawyer says the Rwandan government agrees and would welcome Gupta’s charitable work “with rural districts to ensure that the needs to end H.I.V., malaria, extreme poverty and food security are implemented.”

Nuts — he should go to prison.

According to The New York Times, “Mr. Gupta is the former head of the consulting firm McKinsey & Company and the most influential of the 69 individuals convicted in the government’s sweeping insider-trading crackdown.”

Gupta has influential friends supporting his effort to avoid the spectre of prison bars. The judge who controls Gupta’s future has received “more than 400 letters of support submitted on his behalf, including one from Bill Gates, the Microsoft billionaire and philanthropist, and Kofi Annan, the former United Nations secretary-general.” Gupta has a sterling reputation as a philanthropist. He has done good works.

But Gupta should go to prison. He sat at the pinnacle of a conspiracy. He betrayed trust. His wealth and past good deeds do not excuse him.

On Wednesday, U.S. District Court Judge Jed S. Rakoff should reject Gupta’s pleas for leniency and send him to prison. If Gupta still wants to aid Rwanda, then he should give some of his considerable personal fortune to do so, perhaps by donating to initiatives run by former President Bill Clinton and Bill Gates.

If you or I offered or induced insider trading information, you and I would end up in prison. So should Gupta.

6 replies »

  1. He did the crime, he should do the time. I’m appalled the likes of Bill Gates (of all people!) are pleading for a lighter sentence.

    What’s happened to this country. Decades ago, following the S&L scandal, almost 1400 people went to jail for the parts they played in that financial disaster. Today, none of the major Wall Street banksters who almost brought this country to ruin have paid the price.

    Washington talks about the ‘Rule of Law.’ It would appear we have two sets of Rules: one for Wall Street, and one for Main Street. And so far, no one in Washington seems to have the cajunas to stop Wall Street from raping and pillaging Main Street. At least Hon. Preet Bharara is doing his job!

    • I agreed jail the rats…he deserved it…give him 10 years! Poor american like you and I are jobless while rats like him are sitting at the top post and still GYP america! Burn in hell Rats!

  2. Im the man with full of dreams, in my country if you born poor you will die poor thats the routine of life
    i may not be same as you richest man even dow theres no hope i still make an effort to be same as your status now.if i will have an opportunity i will grab it,even its big or small
    im a small person from philippines
    saying
    life with faith is must worthy.even theres no hope. Its free to dream
    joselleferrer@y.c zai
    tnx gud day

  3. OK, Rajat has sat in my back yard and drunk coffee. My wife has given him advice on his flower beds. We have a strong mutual friend. He’s not a rat, he’s a pretty nice man who became too comfortable with the perks of power and strayed over the line. To someone in his position, $17 mil is the equivalent of treating your brother in law to dinner on your expense account. No big deal. Get as pissed as you like, it’s true. Barely worth stealing.

    Having said that, I agree he should go to jail. It’s appalling that $17 million is considered a trifle. And the coziness at the top of business is very unhealthy and must be stopped.

    But a rat? Not from my experience.

  4. That’s a point I tried to make: that he is a decent man who has done good works. If money is power, and absolute power corrupts absolutely … there’s a corollary about too much money in there somewhere to that aged aphorism …