Former Goldman Sachs director Rajat Gupta caught a huge break as U.S. District Judge Jed Rakoff in New York City sentenced him only to two years in prison for feeding inside information to Galleon Group hedge fund founder Raj Rajaratnam, reports the New York Law Journal. Rakoff rejected a guidelines range of 78 to 97 months as an irrational result because it was driven by the amount of money involved in Rajaratnam’s trades and it was Rajaratnam, not Gupta, who made money on both bad and good news coming from within Goldman Sachs’ boardroom. The judge said two years was enough to send a message of deterrence to would-be insider traders.
Rakoff ordered the sentence, set to begin on Jan. 8, after taking into account Gupta’s charitable giving through organizations such as the Global Fund to Fight AIDS, Tuberculosis and Malaria. Rakoff said Gupta had extended a “big heart and a helping hand” to millions. After taking several shots at the guidelines’ overemphasis on using the amount of money involved in white-collar cases to set the range, Rakoff went for a non-guidelines sentence that stands in stark contrast to the 11 years Rajaratnam is serving. Gupta, 63, was convicted June 15 of conspiracy to commit securities fraud and three substantive counts of securities fraud.