The United States Securities and Exchange Commission has fined former Goldman Sachs Group Inc. (NYSE: GS) director Rajat Gupta $13.9 million and banned him from serving as a director or officer of any public or private company. Gupta is being fined and banned for passing along insider secrets to former hedge fund manager Raj Rajaratnam in 2008.
According to Reuters, the SEC made the ruling on Monday afternoon at a Manhattan courtroom. The decision was delivered by U.S. District Judge Jed Rakoff, who also presided over a 2012 criminal trial that sentenced Gupta to two years in jail for the same insider trading. Gupta is currently appealing his criminal sentencing.
Gupta, 64, leaked classified information about Goldman Sachs inner workings to Rajaratnam during the second half of 2008. The information, which Gupta learned in Goldman Sachs board meetings, included tips on the company’s financial standings as well as a $5 billion investment from Warren Buffett’s Berkshire Hathaway Inc., which came during the heart of the financial crisis. "The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve," George Canellos, co-director of the SEC's enforcement division, said in a statement.
Rajaratnam, former manager of the Galleon Group hedge fund management firm, is currently serving an 11-year prison term for 14 counts of conspiracy and securities fraud.