Wednesday, 26 October 2016
Last updated 1 hour ago
Jul 19 2013 | 9:12am ET
Rajat Gupta, the former McKinsey & Co. chief convicted of passing inside information to Galleon Group founder Raj Rajaratnam, has been ordered to pay $13.9 million to settle related civil charges.
The Securities and Exchange Commission, in announcing the fine, also cited an order by U.S. District Judge Jed Rakoff in Manhattan barring Gupta permanently from acting as an officer or director of a public company and from associating with any broker or investment adviser.
Gupta was convicted in June of passing tips gleaned during his service on the boards of directors at Goldman Sachs and Procter & Gamble. He was sentenced to two years in prison and fined $5 million but remains free on bail pending his appeal.
“Gupta was guilty of an egregious breach of trust involving multiple material disclosures of inside information,” Rakoff wrote. “His nearly unparalleled level of access to upper echelons of corporate executives throughout the world creates the risk that, notwithstanding his fall from grace, Gupta remains well-placed to repeat his misconduct in the future.”
George Canellos, SEC co-director of enforcement, said in a statement:
“The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve. If you abuse your position by sharing confidential company information with friends and business associates in exchange for private gain, you will be prosecuted to the fullest extent by the SEC.”