Jail time apart, Gupta faces acute financial crunch.
By Deepak Chitnis
WASHINGTON, DC: Former Goldman Sachs director Rajat Gupta has filed a motion with a US Court of Appeals to dismiss the $13.9 million in fines levied against him for his role in a massive insider trading case, arguing that his incarceration for the same crime is a severe enough punishment.
Last month, Gupta, 69, lost his appeal to overturn his 2013 conviction on three counts of securities fraud and one count of conspiracy, which landed him a sentence of two years behind bars, one year of additional supervision upon release, a $5 million fine, and a separate $6 million fine in reimbursement to Goldman Sachs. This is separate from the other case – brought against him by the Securities and Exchange Commission (SEC), a civil regulatory agency – that ended with a ruling demanding $13.9 million in restitution from Gupta, the maximum fine allowed in this particular case.
Gupta has already paid $10 million bail, which kept him out of jail during his trial, and will have to pay the aforementioned $5 million in addition to his jail and probation time. Because of that, his legal team argues in a 23-page filing, Gupta should be spared the additional $13.9 million. The document also claims that Gupta received no “direct financial benefit” from the insider trading, and that his involvement with the scheme was a “dramatic deviation” from an otherwise stellar and straight-laced career.
His lawyers also pointed out that Gupta was unlikely to repeat these crimes, has engaged in several philanthropic endeavors throughout his career, and that the criminal fines Gupta already has to pay will have “a profound punitive and deterrent effect” on him, without the need for an additional fine of nearly $14 million.
It’s unlikely, however, that Gupta will have the fine overturned. In addition to losing his appeal, he also lost a request earlier this year to visit India for his nephew’s birthday. The court ruled that Gupta was a serious flight risk, and that he could not be trusted to visit his home country and not return to the US. This was in spite of the fact that Gupta offered to sign a “waiver of extradition,” which would have mandated that India turn Gupta over immediately if the US felt that he was being evasive.
Gupta is just the latest Indian American to be on his way to prison as a result of the Goldman Sachs insider trading fiasco. The scheme has already claimed Raj Rajaratnam, the former hedge fund manager, who incriminated Gupta on several wire-taps that were obtained by the government and used in their case against him.