Fall from grace is complete.
By Deepak Chitnis
WASHINGTON, DC: Disgraced former managing director of McKinsey Rajat Gupta will surrender himself to US correctional authorities on June 17, at which point he will begin his two-year prison sentence for insider trading.
Gupta will have to turn himself in to the Federal Bureau of Prisons by 2:00 PM on said date, according to a court order issued on Thursday. Information regarding what prison Gupta would serve his sentence in, nor any information regarding possible prison locations, was announced.
By announcing a firm start date for Gupta’s prison term, the former corporate honcho’s fall from grace is now, for all intents and purposes, complete.
Gupta was initially convicted on charges of conspiracy and insider trading last June, but appealed the verdict in an effort to clear his name and avoid jail time; that appeal was shot down in March, with the US Court of Appeals for the Second District calling it “without merit.”
Gupta’s history with the courts over the last two years, since he was initially arrested and indicted, has not been good. A lawsuit he filed against former friend and business partner Parag Saxena was dismissed in December for being irrelevant, his appeal was also blocked, and Gupta was even denied permission to visit India for his nephew’s wedding earlier this year. Despite Gupta’s offer to sign a “waiver of extradition,” US District Court Judge Jef Rakoff deemed Gupta to be too serious a flight risk, and would not permit him to leave US soil.
During his time with Goldman Sachs, Gupta passed privileged information regarding stocks and investments to fellow hedge fund manager Raj Rajaratnam, who is currently serving a sizable prison sentence of his own. Wiretaps and other correspondences surfaced that prosecutors used to convict Gupta, whose lawyer argued that the behavior was one smudge on an otherwise unblemished personal and professional record. As a result, Gupta is forever barred from management positions of any kind in the securities industry.
Gupta still has a separate appeal case, which is still live, involving an amended restitution amount of $6.22 million for his criminal malfeasance. There is also a separate civil ruling that demands Gupta pay $13.9 million for his insider trading crimes, brought upon him by the Securities and Exchange Commission (SEC). Gupta appealed to the SEC last week to dismiss the $13.9 million fine, saying that the monetary and punitive damage he has already incurred are more than enough.