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October 24, 2012
Rajat Gupta gets 24-month prison term, $5 million fine at sentencing for insider trading
The early news reports from US District Court in downtown NYC indicate that former Goldman Sachs director Rajat Gupta was sentenced to two years in prison and a $5 million fine for his insider trading, and that he is scheduled to report to prison on January 8, 2013.
This sentence is between the extremes of th 8-10 years sought by prosecutors and the "rigorous community service" sought by the defense. And it should come as no surprise to regular readers based on my comment in this post after seeing the sentencing submissions: "I will (boldly?) predict that Judge Rakoff will impose a sentence somewhere between these recommendations. I will even set my current betting-line over/under at two years in prison." Though I have no actual experience as a bookie, I think the fact that my betting line hit the actual outcome on the number means that the house keeps all bets. Maybe I should look into the (federal sentencing)bookie business.
UPDATE: This new Wall Street Journal account of the sentencing includes these excerpts and quotes of note:
"I think the record, which the government really doesn't dispute, bears out that he is a good man," said Judge Rakoff during the hearing. "But the history of this country and the history of the world, I'm afraid, is full of examples of good men who do bad things."...
Mr. Gupta, who was accompanied to court by his wife and four daughters, apologized to his friends, family and the charitable institutions that he helped to found. "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager," he told the judge before sentencing. "I lost my reputation that I built over a lifetime. Much of the first year seemed surreal to me. However, since the trial I've come to accept the reality of my life going forward," he said....
Prosecutors had argued that Mr. Gupta should receive up to 10 years in prison under the federal sentencing guidelines, which in insider-trading cases are largely based on profits, or losses avoided, because of the illegal tips. But the guidelines are advisory and Judge Rakoff often sentences below them....
Manhattan U.S. Attorney Preet Bharara said in an emailed statement: "With today's sentence, Rajat Gupta now must face the grave consequences of his crime — a term of imprisonment. His conduct has forever tarnished a once-sterling reputation that took years to cultivate. We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Mr. Gupta's footsteps."
October 24, 2012 at 04:25 PM | Permalink
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Not to be thought to be going soft in my golden years, but I have a hard time seeing what interest would be served by giving him a sentence longer than he got. The guy is -- what? -- a 63 year-old, first time, non-drug and non-violent offender with a record of giving to good causes and zero chance of recidivism. If we're going to have non-substantial assistance downward departures, surely this case would seem to qualify.
Posted by: Bill Otis | Oct 24, 2012 11:04:46 PM
Albeit the man gave to charity but he is also a cheat and a liar in a position of great responsibility who valued money over integrity. Not to mention his gaming of the system to profit himself on the backs of others for many years, and for that he should be forgiven with what is basically a slap on the wrist?
Posted by: Jamie | Oct 25, 2012 12:39:09 PM
Bill Otis -- for the first time -- leans in the direction of leniency. And guess who is the defendant? A plutocrat white-collar criminal.
Bill, do you think that the pain and humiliation felt by Rajat Gupta is somehow more intense than that of all the black street criminals you have put away for far more than 2 years? And his being a "non-drug" offender -- but instead someone who outrageously and knowingly breached his fiduciary duties in the most contemptible and egregious acts yet recorded in the annals of insider trading -- is somehow superior to being someone who turns to selling drugs as the only means that their position in this thoroughly dysfunctional society makes available to them to support themselves and their family?
In the past, I have respected your principled tough-on-crime remarks, Mr Otis, but for you now to carve out an exception for white-collar criminals... My eyes are now opened. Your comment about Rajat Gupta reveals the incredible racism and sense of class privilege that has been implicit in your beliefs and statements all along.
Posted by: James | Oct 25, 2012 2:27:25 PM
"And his being a "non-drug" offender -- but instead someone who outrageously and knowingly breached his fiduciary duties in the most contemptible and egregious acts yet recorded in the annals of insider trading -- is somehow superior to being someone who turns to selling drugs as the only means that their position in this thoroughly dysfunctional society makes available to them to support themselves and their family?"
The idea that drug pushers are in the business "to support themselves and their family" is preposterous. I have never encountered a drug pusher who did it out of a need to avert impending hunger. Neither have you. They do it because it beats getting a normal job. Quck, easy money, dontcha know.
"In the past, I have respected your principled tough-on-crime remarks, Mr Otis..."
I don't recall your saying any such thing. Where was that?
"...but for you now to carve out an exception for white-collar criminals..."
What's the criminalS? I'm talking about one case. From that, you're off to the races.
"My eyes are now opened."
I doubt it.
"Your comment about Rajat Gupta reveals the incredible racism and sense of class privilege that has been implicit in your beliefs and statements all along."
That's just classic. First, Gupta is, as they say, a "person of color." He's an Indian. Wake up (or are you bigoted against Indians?). Second, the factors I listed that support leniency have zip to do with race, and are, instead, the very factors many defense lawyers cite all the time no matter who their client. Are they racists too?
Posted by: Bill Otis | Oct 25, 2012 3:25:07 PM
"They do it because it beats getting a normal job. Quck, easy money, dontcha know."
My goodness Mr. Otis, what a hypocrite you sound like. I'm sure this shylock could also be accused of taking the easy way out and making quick and easy millions of dollars at the expense of 1000s of "victims", dontcha think. Maybe in your warped sense of justice only a trip to the woodshed was all that was needed in this case, hey?
Posted by: Jamie | Oct 25, 2012 5:26:34 PM
1. It was a sure bet that, the moment I approved of leniency for ANYONE, the anonymous Left would start bellowing, "hypocrite." Is this supposed to bother me? Whatever. It seems not to bother you that, after endorsing leniency time after time, you're ready to tear Gupta to shreds. You wouldn't be, like, you know, a hypocrite or something?
2. You conspicuously, but wisely, avoid claiming that drug pushers are in it because the poor dears are trying to hold body and soul together. A prudent move on your part.
3. Your reference to "shylock" is blatant anti-Semitism, but why would I expect anything different from the side that, when it suits them -- but only then -- shouts RACISM at its opponents?
4. I'm not aware that two years in prison and a five million dollar fine is "a trip to the woodshed," but, again, since I'm dealing with an anti-Semite, I need to lower the bar.
Posted by: Bill Otis | Oct 25, 2012 5:51:18 PM
"Your reference to "shylock" is blatant anti-Semitism"
As usual another one of your misdirected and weak counter attacks based on more redirected and convoluted reasoning. Your regurgitated counter points never disappoint or surprise. Guess there's still some truth to not being able to teach an an old dog new tricks.
Here's another definition for you
Noun 1. shylock - someone who lends money at excessive rates of interest
loan shark, moneylender, usurer
lender, loaner - someone who lends money or gives credit in business matters
shark - a person who is ruthless and greedy and dishonest
or as you'd rather select
2. Shylock - a merciless usurer in a play by Shakespeare
Posted by: Jamie | Oct 25, 2012 6:50:30 PM
Kudos to Mr. Otis for his perspective in this case. His views are entirely consistent.
I'm a criminal defense lawyer who deals with drug and gun crimes every day. I fight hard for my clients. But the notion that society gave them no option but to sell drugs and guns is something I believe even they, for the most part, would wholeheartedly reject. They would reject it because it demeans who they are and it demeans their potential. It is paternalistic.
Clients know they can do better.
My view is that this society is overly punitive and that the laws are too harsh. Crime is complex. I understand for Mr. Otis it is simple. Don't do the crime. To me, it is more complex than that, but I can understand his perspective.
Rajat Gupta is unique in ways that other defendants are not. He did not simply give money to charity. He actively participated in numerous charities and founded charities that altered innumerable lives for the better. He did not personally profit money-wise from this crime. His life up to that point had been exemplary. His childhood story is remarkable. Bring me a drug or gun defendant with that kind of charitable activity and life story and I too will get my client a fifth of what the guidelines call for. Actually, wait, I have with an even less compelling story.
The judge rightly considered Gupta's personal history and characteristics as a significantly mitigating factor. The judge in a deliberative manner considered each of the s 3553(a) factors and imposed the minimally sufficient sentence that achieves the statutory objectives of sentencing.
Posted by: Jay | Oct 25, 2012 7:07:48 PM
Thanks for some real-life insight.
Posted by: Bill Otis | Oct 25, 2012 9:06:56 PM
The idea that you don't know the undercurrent of using the word "shylock," as opposed to any number of less loaded words you could have used, is nonsense. But I do apologize if I interrupted your Bund meeting.
Posted by: Bill Otis | Oct 25, 2012 9:12:46 PM
God blog ... din blog er meget hjælpsomme ... Jeg er glad for at finde denne post meget nyttigt for mig, da det indeholder mange oplysninger. Jeg foretrækker altid at læse kvalitetsindhold og denne ting jeg fandt i dig skrive. Tak til deling.
Posted by: soldes timberland | Oct 27, 2012 5:31:25 AM