Federal Prosecutor On Gupta Sentence: 'Feels A Little Light'

Short clip.  Former U.S. prosecutor Douglas Burns discusses Raj Gupta's sentence.

John Carney - Why Gupta Did It (CNBC)

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Bloomberg

Rajat Gupta, the former Goldman Sachs director and McKinsey & Co. managing director who rose to the pinnacle of Wall Street, was sentenced to two years in prison for passing inside tips to his business partner.

Gupta, who ran McKinsey from 1994 to 2003, was sentenced today by U.S. District Judge Jed Rakoff in Manhattan for leaking stock tips to Galleon Group LLC co-founder Raj Rajaratnam.  Rakoff ordered Gupta to report to prison on Jan. 8 and fined him $5 million, rejecting a bid to allow him to remain free pending appeal.

Prosecutors had sought a prison term for Gupta of as long as 10 years in prison. Assistant U.S. Attorney Richard Tarlowe today argued that Gupta’s crimes warranted a substantial prison time because of his prominence in the business world and the egregiousness of his crimes. Tarlowe said a sentence of probation would give the impression that there is “a two-tier system of justice.”

While Gupta didn’t personally profit, his tips allowed Rajaratnam to earn millions of dollars.

Rakoff, who has long criticized the federal sentencing guidelines, which are advisory, said he needed to consider the totality of Gupta’s crimes in fashioning a sentence.

“In the court’s view, the evidence established, to a virtual certainty, that Mr. Gupta, well knowing his fiduciary duties, brazenly disclosed material nonpublic information to Mr. Rajaratnam at the very time, September and October 2008, when our financial institutions were in immense distress.”

Before he was sentenced, Gupta briefly addressed the court.

“I lost my reputation that I built over a lifetime,” he said. “The last 18 months have been the most challenging period of my life since my parents died when I was a teenager.”

While Gupta didn’t take responsibility for his conviction, he apologized to his family, friends and McKinsey & Co., as well as the institutions he helped create, such as the Indian School of Business, the Public Health Foundation of India and the America India Foundation.

“Your Honor, as I come before you to be sentenced, the overwhelming feelings in my heart are of acceptance of what has happened, of gratitude to my family and friends, and of seeking forgiveness from them as well,” Gupta said. “It is with these feelings that I hope to move forward and dedicate myself to the service of others.”

Since August 2009, prosecutors in the office of Manhattan U.S. Attorney Preet Bharara have charged at least 72 people with insider trading.  The Galleon case was part of a federal initiative by Bharara’s office and the Federal Bureau of Investigation in New York, called “Perfect Hedge,” that used techniques such as informants and wiretaps, commonly used to combat drug dealers and organized crime figures, against white- collar defendants.

Continue reading at Bloomberg...

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Raj Gupta on India's growth:

Gupta interview - July, 2011.

U.S. Attorney Preet Bharara tells Jim Cramer:

• "I Just Want To Apologize In Advance That I Don't Have Enough Subpoenas For All Of You..." (MUST SEE)

Comments

[DailyBail]

The mythological farm labor crisis is now getting downright embarrassing.

http://www.cnbc.com/id/49519786

[DailyBail]

Big Banks Still Needed to Keep US Competitive: Bove

http://www.cnbc.com/id/49373299

Bove still loves too big to fail.

[DailyBail]

Why Rajat Gupta Did It

http://www.cnbc.com/id/49541592

John Carney

[LiberatedCitizen]

As if we don't know sigh

Fed Bond Purchases Have Not Translated Into Jobs, But Higher Food and Gasoline Prices

http://confoundedinterest.wordpress.com/2012/10/24/fed-bond-purchases-have-not-translated-into-jobs-but-higher-food-and-gasoline-prices/

Ask A Banker: Derivatives, Gambling And Getting Around Regulation

snip

Or to summarize: It is a bet. It's like Vegas, but with more graphs and pie charts ... and we use your Grandma's pension.

http://www.npr.org/blogs/money/2012/10/23/163473122/ask-a-banker-derivatives-gambling-and-getting-around-regulation

Mervyn King: There won’t be a recovery until banks recapitalize

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9628997/Sir-Mervyn-King-no-recovery-until-banks-recapitalise.html

Will CDO Managers Be Held Accountable For Their Role in the Financial Crisis?

http://www.bna.com/cdo-managers-held-n17179870393/

[Cheyenne]

The problem here really isn't the sentence per se. Even relatively short sentences ike the one here are a deterrent, as Matt Taibbi so colorfully reminds us:

"You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."

http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?print=true

The broader and more critical problem is that the underlying crime at issue here--insider trading--is a mere pecadillo compared to the crimes that caused the crisis, namely, accounting fraud and fraudulent MBS sales. Here the failure to prosecute is GUARANTEED to collapse the financial system:

http://www.usabailout.com/content/next-leg-down-financial-crisis-guaranteed-be-worse-2008-0

[Harry Johnson]

This is a tiny step in the right direction. Far too light a sentence and only one of the criminals unfortunately. Thousands of them need to see long terms in serious lockups.

[DailyBail]

The problem here really isn't the sentence per se. Even relatively short sentences ike the one here are a deterrent.

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Exactly.

Yes, this is a little light, I was hoping Raj would get 5 years, roughly 1/2 what his co-conspirator got (11 years). But still, this is GREAT NEWS. White collar folks are highly susceptible to fear of prison. This sentence will sink in all over Wall Street.

How much time will Raj actually serve. Do you get time erased for good behavior in federal cases.

[DailyBail]

And Another Thing

Regarding the light sentence, Raj, the punk, would not admit wrongdoing before the court. Shouldn't that shit be worth an extra 24 months automatically.

Admit your crime, bitch, or else face the apparent non-wrath of Judge Rakoff. I know he's still appealing the orignal verdict, but c'mon sleezebag, own up.

Tell the court what you did and why you did it.

Then, maybe, you can serve just 2 years.

[DailyBail]

The Last Thing

Big Raj (serving 11 years in this case) made millions, from little Raj's tips. Maybe tens of millions. That means little Raj is a co-conspirator in the theft of millions of dollars.

Since when do you get 24 months in golf club prison for that.

[Cheyenne]

The prosecutors only sought 10 years, according to the story. Sentencing is within the sound discretion of the judge, and it sounds like Rakoff gave quite a bit a weight to the fact that Gupta didn't personally profit. That raises the question as to motive, mens rea, etc.

Still, you have a top notch prosecutor here together with a judge who's clearly familiar with Wall Street corruption, so yeah, the sentence does seem a light. But fuck it. It's not every day you see one of these sanctimonious assholes pay a real price for his crime.

Worse yet, if you scale the number of prison sentences for senior executives (1000+) handed down during the S&L crisis on the basis of financial losses ($125 billion) as a ballpark measure for the justice that's due for the current crisis ($12-13 trillion in losses), you'd expect to see 100,000+ executive-level bankers in jail.

And as of today, the total is 0. That speaks to the total devastation of democracy. And yet the vast majority of voters will pull the lever for either Obama or Romney because that's what the media has brainwashed them into doing.

Talk about wasting your vote.

[SKINFLINT]

Maybe he will end up with Bernie. Don't know if you all heard the story of Bernie falling off the bed and cracking up a couple of ribs and had his face smashed up. Minor stuff I know, but, all in all, he seems happy in prison. Maybe Raj will fall off the bed too.