Former Goldman Sachs Group Inc. director Rajat Gupta was ordered to pay a $13.9 million civil penalty and banned from serving as an officer or director of a public company for having illegally passed corporate secrets to former hedge fund manager Raj Rajaratnam, a top U.S. regulator said on Wednesday.
The U.S. Securities and Exchange Commission said the order was issued earlier in the day by U.S. District Judge Jed Rakoff in Manhattan, who also oversaw Gupta's related criminal trial.
Gupta, 64, is appealing his June 2012 conviction and two-year prison term for having fed confidential tips he learned at Goldman board meetings in the second half of 2008 to Rajaratnam, a former billionaire who ran Galleon Group.
Gupta is a former global managing director of the consulting from McKinsey & Co. He remains free during his appeal.
"The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve," George Canellos, co-director of the SEC's enforcement division, said in a statement.
Gary Naftalis, a lawyer for Gupta, declined to comment. A copy of Rakoff's order was not immediately available.
Rajaratnam, serving an 11-year prison term, was the highest-ranking financial executive convicted in a multi-year federal crackdown on insider trading. Gupta is the highest-ranking corporate executive convicted in that probe.
Last month, the federal appeals court in New York upheld Rajaratnam's conviction, rejecting his argument that wiretap evidence was used improperly to convict him.
Gupta in May argued before the same court that wiretap evidence should have been excluded from his trial as well.
In one such call, just before Berkshire's investment was announced, Rajaratnam was heard telling a trader that a caller had told him that "something good might happen to Goldman."
Gupta's criminal sanctions also included a $5 million fine.
The SEC in 2011 won a $92.8 million civil penalty against Rajaratnam, then a record for an SEC insider trading case.
(Copyright Thomson Reuters 2013)