Rajat Gupta, a former director of Goldman Sachs, is getting two years in prison and being fined $5 million for his role in providing insider information to Galleon Group hedge-fund manager Raj Rajaratnam.
The max he was looking at was 25 years, but the max generally isn’t a real number. The government was recommending 10 years, which sounds about right; Rajaratnam got 11. But Gupta got off with two after lots of people testified about what a nice guy he was and his daughter testified about how she’d been harassed at school after his arrest. I’m sorry for his daughter, but that has no bearing on Daddy’s sentence. The guy was walking directly out of Goldman Sachs board meetings to telephone Rajaratnam; that’s pretty brazen.
Unlike homicide, a crime often committed in the heat of the moment and with a less than clear head, it takes a fair bit of premeditation and deliberation to engage profitably in insider trading. That’s exactly the kind of crime that stiffer sentences really will deter. Frog marching the banksters around in orange jumpsuits on live TV probably would also help, I think.
But getting sentenced for insider trading is so 1980s. How ’bout we start sentencing people for blowing up the economy? We wouldn’t want Gupta to be lonely in prison, missing all his friends at Goldman Sachs, would we?
*hed h/t commenter rgqueen