Manhattan's India-born top federal prosecutor Preet Bharara has termed former Goldman Sachs director Rajat Gupta's two-year sentence on insider trading charges a "sad occasion" that will deter others from breaching their corporate duties and leaking boardroom secrets.
Gupta, 63, was sentenced by US District Judge Jed Rakoff yesterday to two years imprisonment followed by a year of supervised release and a USD five million fine.
The IIT and Harvard educated former McKinsey head is one of the most prominent Wall Street titans to be charged by fellow Indian and Harvard alumnus Bharara in the US government's large scale crackdown on insider trading on Wall Street.
"With today's sentence, Rajat Gupta now must face the grave consequences of his crime Ė a term of imprisonment.
His conduct has forever tarnished a once-sterling reputation that took years to cultivate," Bharara said in a statement.
"We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Gupta's footsteps," he said.
Bharara has had a very successful stint so far in bringing to book prominent hedge fund traders and corporate executives who made millions of dollars in illegal profits by
sharing secret corporate information.
Investigations spanning over three years have resulted in convictions of more than 70 traders, bankers, lawyers and corporate executives on insider trading charges.
Among the Wall Street big fish netted by Bharara is former billionaire hedge fund founder Raj Rajaratnam, who is currently serving 11 years in prison.
FBI Acting Assistant Director-in-Charge Mary Galligan said Gupta not only violated ethical standards and terms of his service on the Goldman Sachs board but also broke the law when he passed insider information to Rajaratnam.
"That is what he has to answer for today. The sentence imposed should send a clear message: providing a tip to a friend, when the tip is insider information, has consequences," Galligan said.
Prominent Indian-American lawyer Ravi Batra said the two year prison sentence for Gupta is "just and fair" and Bharara has shown yet again that the "law cannot be trifled with even by masters of the universe."
"This sentence, after hearing the shattered icon's carefully calibrated statement of regret without culpability, serves to warn others, in whose soul lurks criminality and above-law arrogance, that Wall Street must honestly serve Main Street or face ruin, shame and jail," Batra said.
Anil Sood, who has served as an official at the World Bank for 30 years and had been a character witness at Gupta's trial, said the appeal in the case will be the next thing that Gupta would focus on.
He said Gupta's friends and family were praying for the best as they awaited the sentencing.
While Gupta's sentence is a lot less than the 8-10 years that the prosecution was seeking, Sood said two years in prison is "still a lot" for a person who has had a remarkable life so far.