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Shame alone won’t do

- Message in Gupta’s 2-year jail sentence
Rajat Gupta leaves the federal court after the jail sentence was pronounced. (AFP)

Washington, Oct. 25: Rajat Gupta’s odyssey in a New York court was not an individual’s voyage through legal chambers but the trial of the American justice system itself which acquitted well, although Gupta personally lost what he “built over a lifetime”.

He has been ordered by a federal district judge, Jed Rakoff, to spend two years in prison.

Gupta’s jail term is scheduled to start on January 8 next year, just about two weeks short of the usual 90-day period that is allowed to people who are sentenced in such cases to prepare for their transition to prison life.

Gupta could, however, remain free if an appellate court allows him bail while it hears his appeal against yesterday’s sentence, which includes a $5 million fine. He intends to appeal and Gupta’s high-profile lawyer, Gary Naftalis, said in a statement that “we believe the facts of this case demonstrate that Mr Gupta is innocent”.

Gupta’s arrest and the nearly year-long trial process of the man who broke the glass ceiling for Indians on the global corporate stage were replete with coincidences and symbolism. He surrendered to the FBI on Diwali day last year following charges of insider trading that were formally made against him in court.

Yesterday, he was sentenced on Dussehra and Gupta is scheduled to begin his jail term on the eve of the anniversary of Mahatma Gandhi’s return to India from South Africa to begin the freedom struggle.

Gupta was aggressively hunted down by a fellow Indian American, Preet Bharara, the US attorney for the southern district of New York state who said in a widely circulated email yesterday: “With today’s sentence, Rajat Gupta now must face the grave consequences of his crime — a term of imprisonment. His conduct has forever tarnished a once-sterling reputation that took years to cultivate. We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Mr Gupta’s footsteps.”

Ravi Batra, an equally high-profile Manhattan lawyer as Naftalis who is also well known for his social work, said this particular insider trading case had attracted worldwide attention because Gupta’s peers in the corporate world who stood by him and became his community of supporters during the trial represented a “global who is who”.

As many as 400 of them wrote to Judge Rakoff and urged leniency in sentencing Gupta in view of his charitable and social work that weighed against the crimes he was accused of. They included Microsoft founder Bill Gates and former UN secretary-general Kofi Annan.

Batra explained that in the two-phased US legal system, the duty of a jury is to clinically consider the evidence and pronounce a verdict of guilty or otherwise. At a pre-trial hearing in the Gupta case, the judge had made this precise point: “If Mother Teresa were charged with bank robbery, the jury would still have to determine whether or not she committed a bank robbery.”

In the sentencing phase, on the other hand, “justice is on trial”. That, Batra said, is because “society must comprehend and accept a judge’s sentence as fair and just”. The general view was that it was done in Gupta’s sentencing.

While the prosecution argued in court for a sentence of eight to 10 years in prison, Gupta’s lawyers sought a probation under which he would offer community service in Rwanda for healthcare and later in New York for the homeless and the wayward youth. The judge mocked at the proposal as “a kind of Peace Corps for insider traders”.

Several members of the legal fraternity that this correspondent spoke to argued that a probation with no jail term at all in a case like this would have enabled the convict to claim more good deeds, philanthropy and charity without undergoing any formal punishment for a crime.

Judge Rakoff’s sentence, therefore, appeared to be based on the balanced premise that shame alone is not enough of a punishment for Gupta and that just as his crime merits a prison term his good deeds must also get recognition. Also, it was clear from Rakoff’s remarks that his judgment was meant to deter others who may be tempted to repeat the crimes that Gupta was charged with.

“It seems obvious that, having suffered such a blow to his reputation, Mr Gupta is unlikely to repeat his transgressions, and no further punishment is needed to achieve this result. General deterrence, however, suggests a different conclusion…. Insider trading is an easy crime to commit but a difficult crime to catch. Others similarly situated to the defendant must therefore be made to understand that when you get caught, you will go to jail”, howsoever prominent the accused may be, Rakoff said.

The judge acknowledged that “I have never encountered a defendant whose past history suggests such an extraordinary devotion… to people in need.”

Similar consideration for those convicted of crimes is not unusual in the US criminal justice system but such effusive praise for a convict may appear odd only because Gupta, with his record of philanthropy, is not a normal convict.

Judges in the US often show similar leniency during sentencing when a convict has been regularly attending church, has no previous criminal record or is going to college with the prospect of rehabilitation in society after punishment, especially in cases of young people who are charged with a crime.

Naftalis asked for Gupta to be sent to the minimum security prison in Otisville in New York state because it is close to his family’s home in Connecticut. A minimum security prison will also enable Gupta to work with other prisoners and his good conduct in doing such work may get him some consideration for an early release.