The Court noted Gupta’s devotion of a huge amount of time and effort to a very wide variety of socially beneficial activities, such as the Global Fund to Fight AIDS, TB and Malaria, the Public Health Foundation of India etc. Such activities were illustrations of his big heart and helping hand. The Court hailed Gupta’s “extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need”.
On the other hand, Gupta's criminal acts represented the very antithesis of his humanitarian record. With Goldman Sachs in turmoil but on the verge of being rescued by an infusion of $5 billion, Gupta, within minutes of hearing of the transaction, tipped Rajaratnam, so that the latter could trade on this information in the last few minutes before the market closed. This was the functional equivalent of stabbing Goldman in the back.
The Court had to balance both extremes while awarding a sentence to Mr. Gupta. Taking Court observed that “meaningful punishment is still necessary to reaffirm society's deep-seated need to see justice triumphant. No sentence of probation, or anything close to it, could serve this purpose.”
The Court took note of the provisions of the United States Code which require that the Court had to consider the need to afford specific deterrence and general deterrence. As to specific deterrence (i.e. deterring the convict repeating it in future), the Court held that loss of reputation suffered by Mr. Gupta would deter him from repeating his transgressions in future and no further punishment is needed to achieve this result. The need for general deterrence (i.e. to set an example to others), however, suggested different conclusion. Insider trading is an easy crime to commit but a difficult crime to catch. It was necessary to send out the message “when you get caught, you will go to jail”. After carefully weighing the above, the Court sentenced Rajat Gupta to 24 months' imprisonment, concurrent on all counts, to be followed by one year of supervised release and a fine of $5,000,000.
Indians need not despair that, unlike US, legal system moves slowly in India. Two recent instances offer rays of hope. One, the death sentence of Ajmal Kasab for terrorist acts on 26-11-2008 upheld by the Supreme Court in 2012. The other being two Sahara companies found guilty by the Supreme Court of public issue of securities (Optionally Fully Convertible Debentures) in the garb of private placement in 2008. Companies ordered to refund amounts collected from public. This whole case was successfully handled by SEBI, Securities Appellate Tribunal and the Supreme Court in two years flat from 2010 to 2012.