- Gupta did time at Massachusetts camp for insider trading
- U.S. jury found that he tipped Rajaratnam to Berkshire deal
Former Goldman Sachs Group Inc. director Rajat Gupta is a free man after serving 19 months in federal prison for leaking tips to hedge fund billionaire Raj Rajaratnam.
Jailed in June 2014 in Devens, Massachusetts, Gupta was freed after receiving credit for good behavior against his 30-month sentence, according to Patrick McFarland, a manager for the Federal Bureau of Prisons program in the New York area which is overseeing Gupta. McFarland declined to provide more details.
According to a person familiar with the matter, who asked not to be named because the information isn’t public, Gupta was released Jan. 5 and has been living at his Manhattan home. He’s allowed to go to an office during weekdays, the person said.
A former McKinsey & Co. managing partner, Gupta is the highest-profile executive convicted in a U.S. crackdown on insider trading at hedge funds. Since August 2009, federal prosecutors in New York won 80 convictions.
Christian Saint-Vil, a spokesman for Manhattan U.S. Attorney Preet Bharara declined to comment on Gupta’s early release.
Gupta was found guilty in 2012 of passing illegal tips to Rajaratnam, a co-founder of the Galleon Group LLC hedge fund. He told Rajaratnam about Berkshire Hathaway Inc.’s $5 billion investment in Goldman Sachs and the bank’s financial results for two quarters in 2008.
Under a U.S. Bureau of Prisons program called Residential Reentry Management, Gupta must spend his evenings at home, the person familiar with his case said. He’s also permitted to leave for doctors’ and lawyers’ appointments, but must get prior approval from prison officials.
"The idea of our facilities is to assist inmates with transitioning from incarceration to full release," McFarland said in a telephone interview Tuesday. He supervises the program for inmates who win early release from federal prison in cases handled by U.S. prosecutors in the Southern and Eastern Districts of New York as well as New Jersey.
The Bureau of Prisons will continue to oversee Gupta until March 13, when his case will be transferred to federal Probation Department officials, McFarland said.
Gupta is still challenging his conviction, despite having had his appeal rejected by a New York court in July. He asked the appeals court to reconsider, but may have to wait until the Supreme Court rules on the issue, probably by the end of June.
The high court Tuesday agreed to hear a case that may definitively resolve what constitutes a personal benefit in insider trading cases, and whether it has to be something concrete like cash, or just the benefit of a close personal relationship.
Gupta has argued he didn’t get a personal benefit from Rajaratnam.
The minimum-security prison camp where Gupta did his time is about 40 miles (60 kilometers) west of Boston and formerly the site of a military base. Rajaratnam, who is serving 11 years for trading on inside tips, is at an adjacent medical center because he has diabetes and kidney disease.
The case is U.S. v. Gupta, 11-cr-00907, U.S. District Court, Southern District of New York (Manhattan).