Rajat Gupta, the former Goldman Sachs Group Inc director convicted of passing tips to his friend Raj Rajaratnam, was ordered to pay the bank more than $6.2 million (`33 crore) in restitution as a victim of his insider trading.
Rajat Gupta, the former Goldman Sachs Group Inc director convicted of passing tips to his friend Raj Rajaratnam, was ordered to pay the bank more than $6.2 million (`33 crore) in restitution as a victim of his insider trading.
Goldman Sachs argued that as a result of Gupta’s crimes, it was entitled to $6.9 million in legal fees and other expenses it had spent during a federal probe of the bank by the Manhattan US Attorney’s Office and the Federal Bureau of Investigation, as well as a parallel investigation by the U.S. Securities and Exchange Commission.
Gupta, 64, who sat on the board of New York-based Goldman Sachs and Cincinnati-based Procter & Gamble Co, was convicted in June of passing information he gathered at board meetings to Rajaratnam, his former business associate who was co-founder of the hedge fund Galleon Group LLC.
“Goldman Sachs has proved by a preponderance of the evidence that 90% of its tendered expenses were both necessary and incurred during its participating in the investigation and prosecution,” US District Judge Jed Rakoff, who presided over Gupta’s criminal trial, said in a ruling.
Rakoff said that he reviewed over 542 pages of billing records from Sullivan & Cromwell LLP, which represented the firm during the investigation of both Gupta and Rajaratnam.
Rajaratnam, convicted of insider trading in 2011, is serving an 11-year prison sentence.
Gupta was found guilty of leaking tips to Rajaratnam about Goldman Sachs, including information about a $5 billion investment by Warren Buffett’s Berkshire Hathaway Inc on September 23, 2008 and a second tip about a quarterly loss at the firm in October 2008.
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