New York: He has been called the Sheriff of Wall Street. The US Attorney for the Southern District of New York, Preet Bharara - the man who has successfully brought insider trading cases against the likes of Raj Rajaratnam and former Goldman Sachs Director Rajat Gupta - tells NDTV that Insider Trading is pervasive on Wall Street.
Speaking exclusively to NDTV's Sarah Jacob, Mr Bharara says the clean up does not end with Rajaratnam and Gupta. His office is continuing to track down insider traders and that the revelation that such activities will be prosecuted should act as a deterrent in the future.
NDTV: In the 1987 film Wall Street, Gordon Gekko's character had one of the most memorable lines in Hollywood- "Greed is good." Joining us now is a man who is making folks on Wall Street wait, pause and hold that thought! US Attorney for the Southern District of New York, Mr Preet Bharara, thank you so much for speaking to NDTV.
TIME Magazine has called you "The man who is busting Wall Street," the Washington Post says you're the new "Sheriff of Wall Street." The Huffington Post called you the "Scourge of Wall Street" -- meaning it as a compliment. You will probably say you are just doing your job but how do these headlines make you feel? Do you resent it or do you embrace it?
Preet Bharara: You don't think too much about headlines. If you're thinking too much about headlines then you're not doing your job as a prosecutor. And any headline that talks about the work I am doing is short-shifting the work the people in my office are doing-- we have 450 people, 230 of whom are among the finest lawyers in the country, if not the world. So, while it's nice for my Mom, my Mom likes the headlines but for someone who is trying to put their head down and do their job, you don't pay too much attention to it.
NDTV: Some of these headlines are actually playing it safe. Because, if you had lost the case, let's say, against Rajat Gupta these same headlines could be used against you.
Preet Bharara: I think that's probably right. Seeing some of the coverage leading up to both the cases you mentioned, and another case against Rajaratnam last year--- they were suggesting that if we lost the case this would be the end of the insider trading prosecution or the end of how we're going about doing these cases. Nothing could be further from the truth. You bring hard cases and you work as hard as you can on them, and you make sure you bring them because they're righteous and just to bring. If we had not been successful in a particular case, you know, we would have gone on and done all the same cases that we have after those cases. No prosecutor has a perfect record and no prosecutor's office has a perfect record; all you can do is do is a case as well as you can and if it doesn't work out right, you move on to the next case.
NDTV: Well, in the Rajat Gupta trial, Judge Rakoff, who was another huge personality in the court room, made headlines when he said: "The most disturbing thing about this case is what it says about business ethics. It's not a case of one bad apple, but a bushel full of bad apples." Keeping that in mind and your record, is this problem of insider trading much more systemic than we know?
Preet Bharara: I hope, at this point, people appreciate how pervasive insider trading has been on Wall Street and in a lot of other industries, given that we've brought 71 prosecutions and 66 convictions so far. So, I think that gives people an indication of how big a deal it is, how widespread and rampant it is. My hope is, and I hope that people appreciate this, is that when you bring these cases--and you bring them in a good way and you bring them to a good conclusion- that has a deterring effect on other folks; and, so, anybody who is sitting in a board room or at an expert networking firm or, you know, at a company somewhere and is thinking about engaging in insider trading or any other kind of fraud, for that matter, will think not just twice but three times or four times and not engage in that conduct. And, I think, we are having a deterring effect in that way.
NDTV: Instead of a deterrent could there also be an effect where people wisen up, just get smarter to, let's say, wire-tapping, try not talk about these things on the phone or on email?
Preet Bharara: I think people who want to be criminals and engage in criminal activity will figure out ways to adapt. But you will be surprised about how unsmart people are and, in fact, among the 66 people that have been convicted so far, I think everyone would agree, that some of them are among the smartest, most highly skilled people around; you know businesses school degrees, college degrees. So, these weren't dummies and these were people who got caught in compromising positions, in connection with these investigations. It was always the case, and we can continue, to use aggressive tools as we have in the past. And no matter how smart you are, it's generally going to be the case that someone else would know that you committed a crime. And one of the ways that we were able to convict the people that we were able to convict is by, you know, having his co-operating witnesses as some of the people who are working on those criminal activities with them.
NDTV: You mentioned the aggressive techniques you used. You've had critics of the use of wiretaps that was unprecedented. Now that you've got both Rajaratnam and Rajat Gupta convicted, do you feel vindicated?
Preet Bharara: We don't feel vindicated; we feel like we always have done. We engage in aggressive methods that are within the law; the methods that have been described---the use of wire taps--- was launched before I got to the office, by people who were more clever and smart than I was. But I think we were good enough to realize that that was a good way of going about this business and continue them, and defended the wire-taps in court, and we were affirmed the belief that we were doing the right thing, for right reasons. So, I think, the proof is in the pudding. When you bring a case to fruition and it is successful, you feel a sense of satisfaction there because the jury saw things your way.
NDTV: Talking about being clever and smart, it is not unusual for Indian-Americans kids to be over achievers. You are first generation Indian American?
Preet Bharara: Yes, I was born in India.
NDTV: Yes, so was your mom a tiger mom?
Preet Bharara: Actually, my dad was more a tiger dad -if there is such a thing. My mom was the one who tried to get our dad not to punish us quite as harshly. My mom was the kind hearted one in our family. My father was the one to make sure that if we got 98, the next time we got a 100.
NDTV: Talking about getting punished, you have a strong sense of right and wrong. Was that instilled in your childhood then?
Preet Bharara: Yes, I think those values came from my family and books I read, I hope, that most prosecutors have a fine honed sense of right and wrong but I can say it came from my family.
NDTV: Indian American kids are usually nerdy. Did you do the usual spelling bee route? This is a cliché but how come you did not become a doctor?
Preet Bharara: I am not now and have never been in a spelling bee competition. Just to make that clear. I think there was a point - for about a minute and a half - where I thought about following my Dad's admonishing to become a doctor. It passed quite quickly. Finally, it has taken a few years but he has finally come around to it. He is a paediatrician who practices in New Jersey. Yeah, it took about 43 years, but I think he is finally there (laughing)
NDTV: What was the moment that pushed him over the edge?
Preet Bharara: It may be when I got nominated to be the attorney of the United States by the President. I think he finally realized that perhaps I did OK without the medical degree. I think there is, probably, still a part of him that thinks that hopes that when I finish this job, I will go back to medical school.
NDTV: All Indians want a doctor in the family.
Preet Bharara: I think I am a little too old to go back to school. He is going to have to continue to be disappointed with that.
NDTV: What about your Mom?
Preet Bharara: She wasn't as strong about that. She is just happy and proud
NDTV: You're an embodiment of the American Dream. One of the reasons why the Rajat Gupta trial was so compelling is because it saw a rise of one Indian American icon and the fall of the other.
Preet Bharara: My view is that it is a coincidence of ethnicity- when one side of a "versus" sign in a caption in a criminal case, there is somebody of a particular ethnicity, and on the other side there happens to be a person of a similar ethnicity. This office, like this country, is made of people of all backgrounds and faiths and creeds and ethnicities--and this it is also true of the people who prosecute--just because there happens to be some coincidence, I don't think people should be reading into that too much at all.
NDTV: You are a living example of that. Your father is a Sikh, your mother a Hindu. Your wife's Mom is Jewish and her father a Muslim. Dinner at your home or, let's say, choosing where to go out to eat must be quite an exercise.
Preet Bharara: Diversity is good. This country, I think, is the most diverse country that's ever existed.
NDTV: Well, you can't go back to school but you do spend a lot of time with youngsters. I know you make out time to speak to and advice students. A lot of these kids, especially the law students, who go into private practice, could be making more than you...
Preet Bharara: Did you just say that on television? Now my Mom and Dad are going to watch it and worry again! (Smiling)
NDTV: Do you never think about making money?
Preet Bharara: I just want to do this job for as long as I can. I was actually in private practice for 6 years before I came and became a prosecutor in this office. But I've been public service now for 12 years; if I could find a way to do it for the rest of my life, I would. You know, you're not a pauper always when you're in public service, although there are some sacrifices you have to make; I'd like to do this as long as I can. And I go and talk to law students, business students, in part, because I urge them to spend some part of their life in public service as well. You know, these are people who are very, very privileged, they have the best education, and I believe in the proposition that-- to whom much is given, much is expected. And the best lawyers in the country, the best business minds in the country, and the world-- this is true to America and is true to India--- they owe it to their country, and to their community and to their society; dispense some part of their time giving back---whether it's through teaching or by becoming a prosecutor, or by doing charitable work. I don't think we want to live in a world where everybody decides that they want to make the maximum possible salary they can, based on the high level education that they got. That's not a good place to live. So, hopefully, people get some of that message and they can see that not only can it be an amazingly rewarding thing to do, a gratifying thing to do, but also it's also fun.
NDTV: So what is next for you? The big question doing the rounds is what is Preet Bharara going to do next? What about politics, your predecessors Rudy Giuliani and Eliot Spitzer took up political office?
Preet Bharara: I like doing this job and am only thinking about this job. I guess, possibly based on our conversation I could go to medical school (laughing) but I think I will stay doing this as long as I can.
NDTV: Well, it's interesting because you went to Harvard where Rajat Gupta, for example, is also an alumnus. So it's two very different products that have come out of the same university. So when you speak to law students, they have certain choices as to where they can go in life. So what do you tell them when you speak to them?
Preet Bharara: I say don't break the law. When I speak at law schools or business schools and to business people I say, not only is it important that you stay a straight arrow but even if you see wrong doing happening, even if you're an ethical and honest person and you're not involved in that conduct---you need to say something about that. And a lot of scandals that we have seen---and this is true in the United States and I'm sure it's true in India, although I'm not familiar with them---a lot of the scandals that we've seen could have stopped when they were small and people could have been held accountable earlier. And a lot of people could have saved a lot of money, and a lot of people could have saved a lot of grief if really good people who went to good schools and knew better said something about them earlier. And we see time and time again, scandals that were allowed to go on for years and years and years including some of the biggest Ponzi schemes in the history of the world, and were not stopped by the people in the position to stop them. So, another reason to spend time at business schools and law schools is to encourage them to do public service, to encourage them to remain within the bounds of the law, but also encourage them to make sure that they will never find themselves in a position of being enablers of other people who are doing bad things; because there is responsibility to make sure not only that you're doing the right thing but the people around you are doing the right thing also.
NDTV: You speak at law schools and business schools. Indian students are flooding in the law schools and business schools here in the United States. What advice do you have for international students, especially from India, who are looking to live and work, here, in the United States? Especially, after the Rajat Gupta and the Rajaratnam trials there was a debate about the ethics in India being different, even lower, than the United States.
Preet Bharara: I think anybody who comes into the United States--whether from India, or you come from Europe, or you come from Africa, South America, or any other country, Australia, New Zealand--- you need to appreciate what opportunities you have in the United States. My parents availed themselves of that opportunity, and they worked really, really hard even though they came here with not much. And they worked hard on their kids' education and they made sure we worked hard. And now you have the fruit of that. And, I think, people who come from abroad should also appreciate, like I said before in law schools and business schools, that if you have this great opportunity to come to the United States, you owe something back. I often say I will not have enough breaths in my body to give back what I feel I owe to my adopted country. And that's true. I think anybody who comes here and does not take advantage of the educational opportunities, and the upwards-mobility society...should take an opportunity to give something back to the country that has given them so much.
NDTV: Your office covers a spate of crimes but why does the Insider trading cases get so disproportionate attention?
Preet Bharara: The first thing I want to say, with respect to whether or not a particular insider trading incident was important or not, we think all the cases we do here are important. At any given point of time, we have a given handful of assistant US attorneys working on insider trading cases, but we also have attorneys working on other priorities we have here. I'm sure you can imagine and your viewers in India can imagine for anyone the most important, in this day and age is to protect the homeland and to fight against terrorism and to make sure you are preventing terrorist attacks and anybody who thinks to engage in a terrorist attack on your soil is held accountable and is punished. But we also spend a lot of our time on our gang cases, on our public corruption cases, on our civil flawed cases, on our defence civil cases and we spend the same amount of time and energy on all those things and try to bring an excellence to them, so that those cases are done, you know, right. So it may be the case that you only read, the Financial Press, you think all we do is our insider trading cases and particularly those who have a certain types of defendants. But we are a lot more than that and I think that is important for people to appreciate that we are working on all those other cases at the same time as well.
NDTV: How much of this has to do with the fact that there is an anti-Wall Street mood on Main Street?
Preet Bharara: None of that plays any role. All that prosecutors are supposed to do is to determine whether or not justice is served by bringing a case and make sure they can prove their case. That is all that matters. If you don't have that on your side then you don't bring the case. Sometimes there can be a lot of public pressure to bring a case that is the wrong reason to bring it. Sometimes there can be public pressure not to bring a case and that is also a wrong reason not to bring a case. You want to be guided by the fact and the law in every single instance and I hope that's the way that all prosecutors' offices operate.
NDTV: So if we don't have a strong case you don't bring it up at all?
Preet Bharara: Not every incident not every conduct is necessarily criminal. If you don't have the evidence, if it is not clearly a violation of the law then you don't bring the case. We are aggressive and we bring on tough cases but we don't believe in criminalizing that which the statutes did not intend to criminalize.
NDTV: We haven't really had a terrorist attack in US post 9/11. Both India and US lost citizens in the Mumbai terror attacks, are there lessons we can learn from your experience here?
Preet Bharara: I think the world has gotten better at sharing information. I think one of the reasons we have been so good in the US is that right after 9/11 people realized law enforcement agencies need to work together. There needed to be more sharing of information. You couldn't have a wall of the same thickness between Intelligence and Law Enforcement. I think we in New York have one of the most powerful and smart and aggressive Joint Terrorism Task Forces (JTTF's). We have one in New York and it is among many around the country in America. Part of the reason that they get to do such good work, to prevent so many acts of terrorism and hold accountable people who are plotting acts of terrorism, that for the most part have failed is because they work together well. They work with prosecutors early in the process, as opposed to bringing in the prosecutors later in the process, and all of the agencies are working side by side to make sure they are collaborating, not hiding information from each other, not competing with each other but working together to make sure they are keeping not only themselves but their children and their community safe.
NDTV: Talking about terrorism cases, one of the concerns is especially of civil rights groups in the post 9/11 world here in New York, is stereotyping people because of their religion or colour. How does one prevent that?
Preet Bharara: There is always a balance between liberty and security. There are laws and guidelines that we need to adhere to very strictly, as is with the FBI, and we make sure we always do that. What this office does, is not just prosecute terrorism cases and all the other cases we have been talking about, we also prosecute violation of Civil Rights and that is an important legacy of the department of justice going back a very very very long time and we take that obligation seriously as well. We will make sure we are protecting people but also at the same time we make sure that people's rights are protected and vindicated as well.
NDTV: Whether you go into political office or not, you have already left your mark. Thank you for speaking with us.
Story first published:
July 31, 2012 10:48 IST