Rajat Gupta gets chance to void insider-trading conviction

  • PTI, New York
  • Updated: Feb 05, 2016 17:24 IST
File Photo of former Goldman Sachs Group Inc board member Rajat Gupta leaving Manhattan Federal Court following a guilty verdict in his trial in New York on June 15, 2012. \ (Reuters)

In a relief to Rajat Gupta, the India-born former Goldman Sachs director, a US court has agreed to rehear his appeal to throw out his 2012 insider-trading conviction that landed him in jail.

The 2nd US Circuit Court of Appeals in Manhattan on Thursday agreed to revisit its rejection of 67-year-old Gupta’s appeal, five weeks before his release from home confinement on March 13.

Gupta, who was also the global managing director of McKinsey & Co, in the past too had filed several appeals, including to the US Supreme Court to overturn his conviction and a two-year prison term but the courts rejected his arguments and affirmed his sentence.

Gupta, the highest-profile corporate executive found guilty in the US crackdown on insider trading, was convicted in 2012 of passing illegal tips about Goldman Sachs to Galleon Group founder Raj Rajaratnam while serving on the Goldman Sachs board.

Rajaratnam is serving an 11-year prison sentence after his 2011 conviction on insider-trading charges. Gupta and Rajaratnam were the most prominent people rounded up in the US government’s crackdown on insider trading.

He was freed early on January five from Federal Medical Centre Devens, a correctional facility in Massachusetts, after receiving credit for good behaviour. He spent 19 months in jail.

However, he has to stay confined to his apartment until March 13 with an ankle bracelet that will monitor his movements.

Rajaratnam, 58, is serving an 11-year sentence in the same federal prison complex for masterminding a multimillion-dollar insider scheme. He is set to be released in July 2021.

At the age of 45, the IIT and Harvard-educated Gupta became the first Indian CEO of the consulting giant McKinsey. He co-founded the prestigious Indian School of Business with fellow McKinsey executive Anil Kumar, who had pleaded guilty to insider trading and testified as a government witness against Gupta in his trial.

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