NEW YORK — Rajat K. Gupta, the former Goldman Sachs and Procter & Gamble director, was sentenced to two years in prison Wednesday for leaking boardroom secrets to former hedge fund manager Raj Rajaratnam.
Gupta, 63, ran the consulting firm McKinsey & Co. and served as a top adviser to the foundations of Bill Gates and Bill Clinton. He is the most prominent figure to face prison in the governments sweeping crackdown on insider trading.
He was also ordered to pay a $5 million fine.
His conduct has forever tarnished a once-sterling reputation that took years to cultivate, Preet Bharara, the U.S. attorney in Manhattan, said in a statement.
The Justice Departments campaign has reached onto the trading floors of some of Wall Streets largest hedge funds and inside the most revered boardrooms of corporate America. Over a three-year stretch, more than 70 traders, bankers, lawyers and corporate executives have been convicted of insider trading crimes.
Judge Jed S. Rakoff of U.S. District Court in Manhattan handed down a more lenient prison sentence than the eight to 10 years stipulated by nonbinding federal sentencing guidelines.
An Indian from Kolkata and a graduate of Harvard Business School, Gupta rose swiftly through the ranks of McKinsey and headed the firm for a decade. He was a trusted adviser to captains of industry, including Henry R. Kravis of the private equity firm Kohlberg Kravis Roberts & Co. and Peter R. Dolan, the former chairman of Bristol-Myers Squibb. A noted humanitarian, he has also played a leading role in organizations fighting diseases in poverty-stricken nations.
Gupta is one of 23 people criminally charged in a seven-year insider trading conspiracy orchestrated by Rajaratnam, who was convicted in 2011. In May, a jury found Gupta guilty of providing Rajaratnam with advanced word of secret, market-moving news that he learned as a Goldman director.
Rajaratnam is serving 11 years in a federal prison in Ayer, Mass. Guptas sentence is in line with prison terms Rakoff handed down in other recent insider trading cases.
The judge rejected the recommendation from Guptas lawyers for a sentence of probation combined with a rigorous and lengthy program of community service that included a proposal to work in Rwanda on a health program to combat HIV.