A day before he is scheduled to begin serving a two-year prison sentence for insider trading, former Goldman Sachs director Rajat Gupta asked a federal appeals court to reduce a $13.9m civil penalty and shorten his lifetime ban from serving as an officer of a public company.
Reuters reports that Gupta’s lawyer, Seth Waxman, told the 2nd U.S. Circuit Court of Appeals in New York that the penalty was excessive given that Gupta separately was ordered to pay $6m in restitution to Goldman Sachs and $5 million in criminal fines.
But David Lisitza, a lawyer for the U.S. Securities and Exchange Commission, said the $13.9m penalty was appropriate given the brazen nature of Gupta’s actions, even though he did not personally profit.
'This is the insider trading case of our century so far', he said.
Gupta, 65, was convicted in June 2012 of passing confidential tips he heard at Goldman board meetings to his friend, former hedge fund manager and billionaire Raj Rajaratnam. Rajaratnam, the founder of Galleon Group, is serving an 11-year prison term for insider trading.
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