US Supreme Court rejects Rajat Gupta’s insider trading appeal
Wednesday, 22 April 2015 00:05
Reuters: The US Supreme Court on Monday left intact the 2012 insider trading conviction of former Goldman Sachs Group Inc director Rajat Gupta.
Gupta is the highest-ranking corporate official to be convicted in the US Government’s multi-year probe of insider trading in the hedge fund industry. The high court rejected Gupta’s appeal of a March 2014 ruling by the New York-based 2nd US Circuit Court of Appeals that had upheld his conviction. The Government used wiretap evidence to show that Gupta leaked news about Goldman’s finances, including a crucial investment by prominent investor Warren Buffett’s Berkshire Hathaway Inc, by phone to Galleon Group hedge fund founder Raj Rajaratnam.
Gupta, 66, is serving a two-year prison sentence stemming from his conviction. He was also ordered to make $6 million in restitution to Goldman and pay a $5 million fine. Gupta is scheduled to be released from prison in March 2016.
A jury convicted Gupta in June 2012 of passing to Rajaratnam confidential information he learned from Goldman board meetings, including a crucial investment by Buffett. Rajaratnam is serving an 11-year prison sentence. The Supreme Court rejected his appeal in June 2014.
In January, the Supreme Court rejected Gupta’s separate challenge to a permanent ban from acting as a public company officer.
The court then left intact a June 2014 2nd US Circuit Court of Appeals ruling upholding the sanctions. In addition to the officer ban, Gupta was prohibited from further violating securities law and associating with brokers, dealers or investment advisors.
While Gupta’s appeals at the Supreme Court have failed, he launched a new challenge last month to his conviction at the lower court level before US District Judge Jed Rakoff, citing a recent federal appellate court ruling that has limited authorities’ abilities to pursue insider trading cases.
The case on which the court acted on Monday was Gupta v. US, US Supreme Court, No. 14-534.