A former Goldman Sachs and Procter & Gamble board member once widely respected worldwide for his business smarts was sentenced today to 2 years in prison for feeding inside information about board dealings with a billionaire hedge fund owner who was his friend. Rajat Gupta, 63, of Westport, Conn., was sentenced by US District Court Judge Jed Rakoff, who also ordered him to pay a $5 million fine. The Harvard-educated businessman long respected on Wall Street was one of the biggest catches yet for the federal government in its five-year crackdown on insider trading that has so far resulted in 69 convictions.
Gupta was ordered to report to prison on Jan. 8. "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager," he said in a statement. "I regret terribly the impact of this matter on my family, my friends and the institutions that are dear to me. I've lost my reputation I built for a lifetime. The verdict was devastating." The dealings by Gupta that were highlighted at his spring trial stemmed from his relationship with Sri Lanka-born Raj Rajaratnam. The one-time billionaire hedge fund boss controlled up to $7 billion in accounts, giving him a firm footprint in the financial markets and influence that impressed someone as widely regarded as Gupta. Prosecutors described how Gupta raced to telephone Rajaratnam with stock tips sometimes only seconds after getting them from board conference calls. (Read more Rajat Gupta stories.)