On Wednesday, former Goldman Sachs Group, Inc. (NYSE:GS) director, Rajat Gupta, will learn his fate on whether he’ll serve jail time for for insider trading, or instead see a lengthy community service stint in Africa.
Rajat Gupta’s sentencing was to come at 2 p.m. in Manhattan, by U.S. District Judge Jed Rakoff.
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In June, he was convicted of leaking stock tips to Raj Rajaratnam, the co-founder of Galleon Group LLC. Prosecutors have asked that Rajat Gupta spend up to 10 years in prison, while his attorneys have asked that he instead serve a probation, and participate in community service for needy New York children and in Rwanda, serving the poor.
Rajat Gupta is somewhat of a success story, as he had been orphaned in Kolkata at 18, but worked his way up to an American corporate leader.
From 1994 to 2003, he managed the consulting firm McKinsey & Co. and helped triple the firm’s revenue as the firm’s youngest managing director. He served on a number of corporate boards, including The Procter & Gamble Company (NYSE:PG) and AMR Corporation (PINK:AAMRQ), and had received praise for his charity work by Microsoft Corporation (NASDAQ:MSFT) Chairman Bill Gates and the former United Nations Secretary-General Kofi Annan.
Last week, his defense attorney, Gary Naftalis, wrote in a legal brief to the court, via Bloomberg, “Rajat Gupta has lived an exemplary life of uncommon accomplishment, compassion, and generosity.”
A letter supporting Rajat Gupta’s participation in community service came from Tharcisse Karugarama, minister of justice and attorney general of Rwanda. He has supported a proposal that the former executive work with the poor and help fight AIDS, malaria, and poverty in his country.
Rajat Gupta has experience doing so, as he is the former chairman of the Global Fund, which is a public-health advocacy group for developing countries.
But prosecutors didn’t buy the good character and responded that Gupta “was at the pinnacle of a profession built on protecting client confidences. Yet, time and time again, over the span of nearly two years, Gupta flouted the law and abused his position of trust.”
Prosecutors referred to non-binding federal guidelines and asked Rakoff to put Gupta in prison for a term of 97 months to 121 months. They asked for a tough sentence, due to his violations of confidences and breaches in his responsibilities as a senior official, reported Bloomberg.
If Rakoff hands down a prison term, he will have to determine whether Rajat Gupta goes in the upcoming weeks, or remains out until an appeal decision is handed down.
While waiting for his sentencing, Rajat Gupta has remained free on bail.