Barred permanently from being officer in any public company.
By American Bazaar Staff
NEW YORK: Rajat Gupta, the former Goldman Sachs board member and head of McKinsey & Co., has got another big jolt, with a Federal judge ordering him to pay a penalty of $13.9 million for civil violations that resulted from insider trading, the Securities and Exchange Commission (SEC) announced, today.
The order by the judge also permanently bars Gupta, 64, from acting as an officer or director of a public company and from associating with any broker, dealer or investment advisor.
“The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve,” George Canellos, co-director of SEC enforcement, said in a statement. “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.”
The case by the SEC emanated from Gupta communicating with former Galleon hedge fund tycoon Raj Rajaratnam, who himself is serving a 11-year sentence in federal prison. Gupta was found guilty on June 15, 2012, of giving confidential information to Rajaratnam about Berkshire Hathaway Inc. $5 billion investment in Goldman Sachs, as well as other information.
Gupta was sentenced to two years in prison and ordered to pay a $5 million criminal fine this past October, for giving boardroom secrets to Rajaratnam. Gupta is out on bail, and has appealed the decision.
Gupta’s financial travails are also growing, as he is also fighting to avoid paying his legal fees which runs into likely millions of dollars, and it rests upon his appeal to the decision in October.