World
Rajat Gupta should pay $15 million penalty: SEC

SEC said Gupta should be ordered to pay a maximum civil penalty of $15 million and barred from serving as director of any publicly-traded firm for his 'terrible breach of trust' by indulging in insider trading

New York: The US government has asked a court in New York to slap a maximum penalty of $15 million on India-born fallen Wall Street titan Rajat Gupta and permanently bar him from serving as director of any publicly-traded firm for his "terrible breach of trust" by indulging in insider trading, reports PTI.

 

Weeks after the former Goldman Sachs Director was handed down a two-year jail term and fined $five million by US District Judge Jed Rakoff, the US Securities and Exchange Commission (SEC) said he should be ordered to pay a maximum civil penalty of $15 million, which would be thrice the $5 million in gains and losses avoided as a result of his "illegal conduct."

 

Gupta, 63, who is set to begin his prison term in January, has filed an appeal against his conviction in the US Court of Appeals for the Second Circuit.

 

According to the Notice of Appeal filed by his lawyer Gary Naftalis in US District Court Southern District of New York, Gupta's "appeal concerns conviction only."

 

Apart from the criminal case filed against him by Manhattan's India-born federal prosecutor Preet Bharara, Gupta faces charges filed by the SEC of "abusing his position of trust" and passing confidential information about Goldman Sachs and Proctor and Gamble to now-jailed hedge fund founder Raj Rajaratnam.

 

"The court should impose the maximum three-time civil penalty of 15,096,585 dollars to punish Gupta for his terrible breach of trust and his craven, criminal conduct and to deter others from engaging in such conduct in the future," the SEC said in a motion filed in federal court here.

 

The Commission has also sought an order permanently enjoining Gupta from future violations of the federal securities laws, barring him from serving as an officer or director of any publicly-traded company, barring him from associating with any broker, dealer or investment adviser and disgorgement of all ill-gotten gains received as a result of his illegal actions.

 

"Gupta's conduct was far more egregious than that of the vast majority of defendants convicted of insider trading and warrants maximum penalty under the law," the federal regulator said. "He betrayed the enormous trust and confidence bestowed upon him in the most egregious manner possible."

 

The SEC argued that despite his conviction, Gupta would still have a "lifelong" network of friends and business associates in the US and abroad and with their help, he would be able to create for himself or be offered business positions that "make him privy to corporate secrets."

 

Gupta, who produced over 400 letters of support, including those by Microsoft founder Bill Gates and former UN chief Kofi Annan prior to his sentencing, would continue to have access to highly placed corporate insiders, the SEC said.

 

"The danger of his access to material, non-public information still exists. Nothing currently prevents Gupta from using his continuing access to corporate insiders to solicit inside information and trade on it on his own behalf," the SEC argued.

 

Given Gupta's "potentially reduced earning ability" in future in the wake of his conviction, the incentives for him to seek financial gains and prestige would increase.

 

Further, Gupta has maintained throughout that he has done nothing wrong and has not accepted responsibility for his misconduct, the SEC said.

 

"Given his failure to acknowledge that he did anything wrong, there can be no assurances that he will not engage in the same misconduct in the future. A permanent injunction against Gupta is necessary to protect the public interest," the regulator said.

 

The SEC complaint charges Gupta with disclosing to Rajaratnam Berkshire Hathaway's September 2008 investment of $5 billion in Goldman Sachs, Goldman's second quarter financial results in 2008 and Proctor and Gamble's January 2009 earnings release.

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COMMENTS

Vinay Isloorkar

5 years ago

Another dot to be joined.Manoj Bhargava, among the richest Indian Americans is under the lens by the FDA for his energy drink. I am not too sure that we should be vicariously celebrating what looks like Indians bashing.

Shadi Katyal

5 years ago

It is a shame that Mr. Gupta felt that he was above the Law or should onew say that hew felt like in India he would be able to get away with it. Why so much greed and bring a bad named to the nation. It is evident that most of us Indians carry our childhood such habits even reaching at the Zenith.

UPA government says ready to face even no-confidence motion

The UPA government asserted that it was ready to face any situation, including a No-Confidence Motion, even as it was reaching out to political parties to ensure passage of key bills including amendment of the Insurance Bill to raise FDI cap from 26 to 49%, Banking Regulation Amendment Bill and Direct Taxes Code

 
New Delhi: Gearing up for opposition attack on foreign direct investment (FDI) during the upcoming Parliament session, Indian government on Friday asserted that it was ready to face any situation, including a No-Confidence Motion, even as it was reaching out to political parties to ensure passage of key bills, reports PTI.
 
It ruled out any possibility of mid-term polls, saying the government will last its full term of five years till 2014.
 
Finance Minister P Chidambaram, Telecom Minister Kapil Sibal and I&B Minister Manish Tewari, who were fielded before the media ahead of the Winter Session beginning 22nd November, said the government is ready to discuss any issue under any rule with the permission of the Chair.
 
"The Parliament session has a very heavy legislative agenda. We are reaching out to the various political parties to carry through these agenda in the four weeks that we have for the session," said the Finance Minister.
 
He noted that Prime Minister Manmohan Singh has met leaders of supporting parties and would be meeting United Progressive Alliance (UPA) allies.
 
"We sincerely hope that the forthcoming session will be a productive one and many bills will be passed," he said.
 
The important economic agenda includes amendment of the Insurance Bill to raise FDI cap from 26 to 49%, Banking Regulation Amendment Bill and Direct Taxes Code.
 
When pointed out that the opposition was gearing up to target the government over FDI in multi-brand retail, Tewari said, "if they want to corner us, we no objection. We are ready to discuss anything if the rules permit. But if Parliament is not allowed to function, it would not be good for Parliamentary democracy." 
 
To a question about Trinamool Congress, a former ally of the UPA, threatening to move No-Confidence Motion, Sibal said, "it is the right of every political party to put any motion before the House. When the motion is brought before the House, we will face it." .
 
The Left parties have tabled a motion that will seek a vote on FDI. The main opposition BJP, its ally JD(U) as also Trinamool Congress, which parted ways with the UPA few months back on the issue, have also given notices.
 
To add to government's discomfiture, sulking ally DMK is also not disclosing its stand on how it would vote either on such motions or the No-Confidence Motion, likely to be moved by Trinamool Congress.
 
DMK chief M Karunanidhi said in Chennai on Wednesday that his party's stand on the FDI issue is a "suspense".
 
Seeking to downplay the FDI matter, Chidambaram said, "my suggestion is that not one issue should be blown out of proportion. There are many very important issues that concern the welfare of people and future of country." 
 
Sibal said the government had clearly said that states which do not want to implement the decision were free not to do it. However, if some states want to implement FDI, other states should not object, he said.
 
When referred to speculation about early polls, Tewari said that ever since the UPA-II had come to power, there had never been three months when there was no such talk.
 
"The government has been elected for five years. People have given mandate for five years. The government will last for five years," he said.
 
His assertion came against the backdrop of Samajwadi Party releasing its first list of candidates for Lok Sabha polls.
 
At present, the government enjoys the support of about 265 MPs, including 18 of DMK, in the House of 545. With the support of Samajwadi Party (22) and BSP (21), the backing for the ruling coalition goes a little over 300, which is comfortable over the required 273 majority mark in Lok Sabha.
 
BSP and SP together or individually have not shown signs of withdrawing support so far.
 

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Oil companies resume issuing new subsidised LPG connections

In September, issue of new LPG connections had been put on hold pending a massive nationwide exercise to eliminate users having multiple connections at the same address

New Delhi: After a few weeks of hiatus, state-owned oil companies have resumed issuing new subsidised cooking gas (LPG) connections, beginning with North Eastern states, reports PTI.

 

In September, issue of new LPG connections had been put on hold pending a massive nationwide exercise to eliminate users having multiple connections at the same address.

 

The three oil PSUs have now started releasing new LPG connections in Meghalaya, Sikkim, Nagaland and Andaman & Nicobar Islands, said Indian Oil Corp, the nation's largest fuel retailer.

 

Jammu & Kashmir, Himachal Pradesh, Manipur and Tripura will follow suit shortly. New connections would be released in other states once the exercise to eliminate duplicate connections is completed.

 

"Prospective customers, who have registered for new LPG connections till 15th October with gas distributors of oil marketing companies -- IOC, Bharat Petroleum and Hindustan Petroleum in Meghalaya, Sikkim, Nagaland and Andaman & Nicobar Islands and who do no posses LPG connection, can now avail of a subsidised new LPG connection," IOC said in a statement.

 

The same for customers in J&K, HP, Manipur and Tripura will be announced soon, it said.

 

IOC said though oil firms had stopped releasing new connections pending completion of de-duplication process, they had continued to accept registration of new allotments.

 

"For convenience of customers, oil marketing companies have also extended the deadline for completion of Know-Your Customer (KYC) forms till 30th November," it said. "Only multiple connection holders should submit the KYC details before the new deadline."

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