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A rich man’s insider trading deserves prison

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The American government wants Rajat K. Gupta to go to prison for up to a decade. He wants to go to Rwanda to do community service and call that sufficient punishment for his crimes.

A jury convicted Gupta in June of conspiracy and securities fraud for leaking Goldman Sachs boardroom secrets to billionaire hedge fund manager Raj Rajaratnam.

This was an insider trading case: Rajaratnam got the tips; Gupta provided them. Result: Because of Gupta’s tips, Rajaratnam’s hedge fund, the Galleon Group, illegally earned or avoided loss totaling $17 million, said the Securities and Exchange Commission.

Gupta awaits sentencing. But he wants to go to Rwanda to become the equivalent of a Peace Corps volunteer, albeit a very rich one. His lawyer says the Rwandan government agrees and would welcome Gupta’s charitable work “with rural districts to ensure that the needs to end H.I.V., malaria, extreme poverty and food security are implemented.”

Nuts — he should go to prison.

According to The New York Times, “Mr. Gupta is the former head of the consulting firm McKinsey & Company and the most influential of the 69 individuals convicted in the government’s sweeping insider-trading crackdown.”

Gupta has influential friends supporting his effort to avoid the spectre of prison bars. The judge who controls Gupta’s future has received “more than 400 letters of support submitted on his behalf, including one from Bill Gates, the Microsoft billionaire and philanthropist, and Kofi Annan, the former United Nations secretary-general.” Gupta has a sterling reputation as a philanthropist. He has done good works.

But Gupta should go to prison. He sat at the pinnacle of a conspiracy. He betrayed trust. His wealth and past good deeds do not excuse him.

On Wednesday, U.S. District Court Judge Jed S. Rakoff should reject Gupta’s pleas for leniency and send him to prison. If Gupta still wants to aid Rwanda, then he should give some of his considerable personal fortune to do so, perhaps by donating to initiatives run by former President Bill Clinton and Bill Gates.

If you or I offered or induced insider trading information, you and I would end up in prison. So should Gupta.

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Written by Dr. Denny Wilkins

October 19, 2012 at 7:06 pm

Posted in Uncategorized

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