Gupta asks for probation on insider trading charges

New York: Federal prosecutors have sought 8-10 years in jail for Indian-American Goldman Sachs director Rajat Gupta for his "shocking" insider trading crimes even as he pleaded to be spared a prison term and offered to perform community service in Rwanda.

Prosecutors and Gupta's defence team each submitted their sentencing memorandum in US District Court here on Wednesday, a week before US District Judge Jed Rakoff sentences Gupta on insider trading charges.

In a 12-page memorandum, Manhattan's top federal attorney Preet Bharara said a "sentence within the applicable guidelines range of 97 to 121 months imprisonment is appropriate" for Gupta, who repeatedly flouted the law and abused his position of trust and in his "callousness and above-the-law arrogance" committed crimes which were "extraordinarily serious and damaging to the capital markets".

"Gupta's crimes are shocking," Bharara said arguing that, "a significant term of imprisonment is necessary to reflect the seriousness of Gupta's crimes and to deter other corporate insiders in similar positions of trust from stealing corporate secrets and engaging in a crime that has become far too common."

Prosecutors said Goldman Sachs, which was "an identifiable victim of Gupta's criminal conduct," is seeking restitution to the amount of USD 6.8 million, including the fees the company incurred in the course of investigations and legal proceedings as well as a portion of the compensation that Goldman paid to Gupta as a director.

They said Gupta should also forfeit USD 1,150,000, which is 10 per cent of the trading gains hedge fund founder Raj Rajaratnam made as a result of Gupta's illegal tips to him. In his sentencing memorandum, Gupta's lawyer Gary Naftalis sought probation and said his client is ready to perform a "rigorous full-time programme of community service".

The offers for community service involve working with homeless and runaway youth as well as "a less orthodox but innovative proposal" of living in the backward districts of Rwanda and working with the local government on health care initiatives with particular focus on HIV/AIDS and malaria and agricultural development.

Naftalis said Gupta's "once sterling reputation, built over decades, has been irreparably shattered, and his business and philanthropic accomplishments tainted".

Gupta's "monumental fall" is itself severe punishment and courts have previously recognised that "if used wisely, probation is sufficiently serious punishment to satisfy the statutory mandate that the sentence reflect the seriousness of the offense and provide just punishment".