NEW YORK (TIP): Former Goldman Sachs Group Inc director Rajat Gupta on Tuesday, June 17, lost his challenge to a $13.9 million civil penalty and a permanent ban from acting as an officer for a public company, the same day he was scheduled to begin serving a two-year prison sentence. In a brief order, the 2nd US circuit court of appeals rejected Gupta’s claim that the penalty and ban were excessive. A federal jury convicted the 65-year-old in June 2012 of passing confidential information he learned from Goldman board meetings to Raj Rajaratnam, the former billionaire and founder of the Galleon Group hedge fund. Ironically, Gupta is being sent to a prison that has as its inmate Raj Rajaratnam, founder of the New York hedge fund Galleon Group, the man to whom he was convicted of giving insider information on a raft of companies including Goldman Sachs.
The Sri Lanka born Rajaratnam, who is serving an 11-year sentence, is a diabetic and is at the FMC Devens’ medical unit because he has to undergo dialysis. Gupta himself will undergo a medical check-up soon after reporting at the prison before he is lodged in the satellite camp, which reportedly has some 130 inmates. Over the past few weeks, Gupta is reported to have spent time with his family, including going on short holidays with his four daughters, in anticipation of serving his sentence.
However, prison guidelines will enable them to visit him on Fridays between 2:30 pm and 8:30 pm and on Saturdays, Sundays and federal holidays between 8:30 am to 3:00 pm. One of IIT’s best known graduates, Gupta is said to be writing a book about his ordeal and also planning a visit to India as soon as he is released from prison, according to Anita Raghavan, author of “The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund,” a book about the white collar case that rocked Wall Street and corporate America.
“Gupta will have no trouble lining up consulting assignments from Indian companies. But his sterling calling card – offering Indian executives unparalleled access to American chief executives and politicians – will be badly tarnished,” Raghavan wrote in NYT’s Dealbook last week.