New York, Oct 14 : US prosecutors may seek an 8-10 year prison term for ex-Goldman Sachs director Rajat Gupta for his conviction in insider trading but the judge could give the India-born Wall Street executive six years or less, especially in light of his “otherwise unblemished record,” legal experts say.
Gupta, 63, will be sentenced on October 24 by US District Judge Jed Rakoff.The ex-Mckinsey head is the most prominent corporate executive convicted in the US government's sweeping investigation into insider trading and his sentencing comes exactly a year after criminal charges were brought against him by India-born US Attorney in Manhattan Preet Bharara.
Federal prosecutors and Gupta's defence team are likely to file their respective memos to the judge this week in which both sides would make a case for what sentence Gupta should be given and what the judge should keep in mind in handing down the prison term.
Ahead of his sentencing, more than 200 prominent business and global leaders, including Microsoft founder Bill Gates and former UN Chief Kofi Annan, have written letters of support to Rakoff detailing Gupta's philanthropic work.
Rachel Barkow, a Professor of Regulatory Law and Policy at the New York University School of Law, said the “realistic” applicable baseline range for sentencing for Gupta would be either 6-10 or 8-10 years but it is that Rakoff could go to the high end of this range.
“It is more likely that Rakoff could decide on a six year or even lower prison term for Gupta,” Barkow told PTI. “It is not necessary to give Gupta a high sentence to serve the purpose of punishment, particularly in light of his otherwise unblemished record.”
Gupta will in all likelihood appeal against any prison term he gets.
Barkow said if hedge fund founder Raj Rajaratnam, who is serving an 11-year jail term, wins some of the issues in his appeal, it would have ramifications for Gupta's case but the odds for Gupta winning his appeal go down more if Rakoff gives him a lower range.
“Gupta will have to be careful in his appeal as the government too can appeal any low sentence Gupta gets,” she said.
In sentencing Gupta, Barkow said, the judge will take into account factors like the quantum of loss to the markets caused by the illicit gains that Rajaratnam made on account of the inside information Gupta passed to him.
Rakoff would also consider whether Gupta abused his position of trust.
“Even if the judge finds that Rajaratnam made 10 million dollars in illicit profit and that Gupta did abuse his position, it will be very surprising to see Rakoff deciding on the higher range of 8-10 years.
He could go very below the guidelines range,” she said.
“I cannot imagine Gupta getting a prison term of 10 years, which will be just one year less than what Rajaratnam is currently serving. Rajaratnam's conduct was significantly more culpable.”
Barkow further said a prison term of 8-10 years will be a very “steep sentence” for someone like Gupta who has had a stellar and clean career, which also includes a great deal of philanthropic work.
City-based prominent attorney Ravi Batra echoed Barkow's estimates and said while he expects the prosecutors to seek an 8-10 year prison term, “the judge will sentence Gupta to less than Rajaratnam and about five years or less.”
Batra said Rakoff will take stock of Gupta's “good, bad and ugly deeds”, consider the request from the prosecutor's office, defence's no-jail request, the jury's verdict and evidence in deciding a “just and equitable sentence."
