Rajat Gupta trial: Who said what

New York: A former Goldman Sachs and Procter & Gamble Co. board member Rajat Gupta was sentenced to two years in prison Wednesday, culminating a spectacular fall from grace for a man whose good deeds worldwide brought him leniency after he was convicted of feeding inside information about board dealings to a billionaire hedge fund owner who was his friend.

Here's what each of the players in this trial said.

Judge Jed S. Rakoff

• Imposing a sentence on a fellow human being is a formidable responsibility. It requires a court to consider, with great care and sensitivity, a large complex of facts and factors. The notion that this complicated analysis, and moral responsibility, can be reduced to the mechanical adding-up of a small set of numbers artificially assigned to a few arbitrarily-selected variables wars with common sense. Whereas apples and oranges may have but a few salient qualities, human beings in their interactions with society are too complicated to be treated like commodities, and the attempt to do so can only lead to bizarre results
• The heart of Mr. Gupta's offenses here, it bears repeating, is his egregious breach of trust. Mr. Rajaratnam's gain, though a product of that breach, is not even part of the legal theory under which the Government here proceeded, which would have held Gupta guilty even if Rajaratnam had not made a cent.
• All the evidence before the Court -- not just the letters written on Mr. Gupta's behalf but also the objective facts of record -- establish beyond cavil that Mr. Gupta has selflessly devoted a huge amount of time and effort to a very wide variety of socially beneficial activities, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Public Health Foundation of India, the Indian School of Business, the Pratham Foundation (which provides quality education to underprivileged children in India), the Cornell Medical School, the Rockefeller Foundation, and many many more. As well summarized in his counsel's sentencing memorandum, such activities are but illustrations of Mr. Gupta's big heart and helping hand, which he extended without fanfare or self-promotion, to all with whom he came in contact.
• In the Court's view, the evidence at trial established, to a virtual certainty, that Mr. Gupta, well knowing his fiduciary responsibilities to Goldman Sachs, brazenly disclosed material non-public information to Mr. Rajaratnam at the very time, September and October 2008, when our financial institutions were in immense distress and most in need of stability, repose, and trust.
• The Court can say without exaggeration that it has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need.
• Having finished his spectacular career at McKinsey in 2007, Gupta, for all his charitable endeavors, may have felt frustrated in not finding new business worlds to conquer; and Rajaratnam, a clever cultivator of persons with information, repeatedly held out prospects of exciting new international business opportunities that Rajaratnam would help fund but that Gupta would lead.
• There is also in some of the information presented to the Court under seal an implicit suggestion that, after so many years of assuming the role of father to all, Gupta may have longed to escape the straightjacket of overwhelming responsibility, and had begun to loosen his self-restraint in ways that clouded his judgment. But whatever was operating in the recesses of his brain, there is no doubt that Gupta, though not immediately profiting from tipping Rajaratnam, viewed it as an avenue to future benefits, opportunities, and even excitement
• As this Court has repeatedly noted in other cases, insider trading is an easy crime to commit but a difficult crime to catch. Others similarly situated to the defendant must therefore be made to understand that when you get caught, you will go to jail.
• Defendant's proposals to have Mr. Gupta undertake various innovative forms of community service would, in the Court's view, totally fail to send this message. Moreover, if the reports of Mr. Gupta's charitable endeavors are at all accurate, he can be counted on to devote himself to community service when he finishes any prison term, regardless of any order of the Court.
• At the same time, no one really knows how much jail time is necessary to materially deter insider trading; but common sense suggests that most business executives fear even a modest prison term to a degree that more hardened types might not. Thus, a relatively modest prison term should be "sufficient, but not more than necessary," for this purpose.
  

Rajat Gupta (before he was sentenced)

• The last 18 months have been the most challenging of my life since I lost my parents as a teenager.
• I regret terribly the impact on family, friends, and institutions that are dear to me.
• I feel terrible that they have been burdened with totally undeserved negative attention.
• I apologize to them and ask for their forgiveness.
• I've lost my reputation I built for a lifetime.
• The verdict was devastating.

Manhattan US attorney Preet Bharara

• With today's sentence, Rajat Gupta now must face the grave consequences of his crime - a term of imprisonment.
• His conduct has forever tarnished a once-sterling reputation that took years to cultivate.
• We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Mr. Gupta's footsteps.

Defence Attorney Gary P. Naftalis

• My client has suffered a fall "of Greek tragedy proportions.
• Mr. Gupta maintains his innocence and will vigorously pursue an appeal.  We continue to believe that the facts of this case demonstrate that Mr. Gupta is innocent of all of these charges, and that he has always acted with honesty and integrity.
  

Mary Galligan, FBI's acting assistant director-in-charge

• He broke the law. That is what he has to answer for today. The sentence imposed should send a clear message: providing a tip to a friend, when the tip is insider information, has consequences.

(With agencies inputs)