Ex-Goldman director jailed

Former Goldman Sachs board member Rajat Gupta, a pillar of the New York financial establishment, was sentenced to two years in jail and fined $5 million for insider trading Wednesday. US District Judge Jed Rakoff gave a much more lenient sentence than the 10-year stretch requested by government prosecutors, although he rejected a defense request for a community service sentence. Gupta, who was ordered to turn himself in on December 11, was solemn, but showed no emotion as he heard his fate. Rakoff said Gupta, a major philanthropist who has been a leader in fighting malaria in Africa and in helping disadvantaged youths, "deserves credit." The Manhattan federal judge noted that several jurors cried as they delivered their guilty verdict "because they recognized this was a person with some very good attributes." But he added that America's senior executives committing insider trading "must be made to understand that when you get caught, you will go to jail." Rakoff said Gupta's feeding of secret business information about Goldman Sachs to his friend, the now imprisoned hedge fund tycoon Raj Rajaratnam, at the height of the 2008 Wall Street financial crisis was "disgusting" and the "equivalent of stabbing Goldman in the back." The corrosive effect of insider trading, Rakoff said, "is to place in jeopardy the value of the marketplace, which is one of the most valuable assets the country possesses." For the prosecution, Manhattan US Attorney Preet Bharara was equally harsh. "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," Bharara said. "We hope that others who might consider breaking the securities laws will heed this sad occasion and choose not to follow in Mr Gupta's footsteps."