Sunday, January 18, 2015

U.S. Supreme Court rejects former Goldman Sachs Group director challenge to a permanent ban

The U.S. Supreme Court on Monday rejected former Goldman Sachs Group director Rajat Gupta’s challenge to a permanent ban from acting as a public company officer.
The court’s refusal to hear the case means a June 2014 2nd U.S. Circuit Court of Appeals ruling upholding the sanctions remains intact. In addition to the officer ban, Gupta was prohibited from further violating securities law and associating with brokers, dealers or investment advisors.
Gupta, 66, is serving a two-year prison sentence stemming from his conviction in a separate criminal case.
The appeals court had concluded that a $13.9 million fine and the officer ban imposed in a civil case brought by the U.S. Securities and Exchange Commision were not excessive.
A three-judge panel of that court concluded that U.S. District Judge Jed Rakoff, who oversaw the criminal and civil cases, acted within his discretion in imposing that punishment. Rakoff imposed the officer ban in the civil case despite finding at the criminal sentencing that Gupta was unlikely to commit future crimes.
A jury convicted Gupta in June 2012 of passing confidential information he learned from Goldman board meetings, including a crucial investment by prominent investor Warren Buffett, to Raj Rajaratnam, the onetime billionaire founder of the Galleon Group hedge fund. Rajaratnam is serving an 11-year prison sentence.

In his criminal case, Gupta was also ordered to make $6 million in restitution to Goldman and pay a $5 million fine.
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