Gupta Ordered to Pay Goldman Sachs $6.22 Million

“A federal judge on Monday ordered formerGoldman Sachs Group director Rajat Gupta to reimburse $6.22 million to the bank to help cover its legal expenses related to his criminal insider trading case.

Goldman had sought to recover $6.91 million from Gupta, and U.S. District Judge Jed Rakoff said the bank had proved it was entitled to 90 percent of what it requested.

Gupta is appealing his June 15, 2012 conviction and two-year prison term for leaking boardroom secrets to Raj Rajaratnam, the hedge-fund manager at the center of a multi-year U.S. government crackdown on insider trading.

Goldman had sought to recover the fees it had paid its law firm Sullivan & Cromwell in connection with the case and related matters, citing the federal Mandatory Victims Restitution Act, which requires restitution in some fraud cases.

Gupta had opposed making restitution but Rakoff, who presided over his criminal trial, said nearly all of what Goldman sought was a “necessary, direct, and foreseeable result of the investigation and prosecution of Gupta’s offense of conviction and thus well within the statute’s coverage.”

Rakoff said Goldman could also recover legal costs linked to a related U.S. Securities and Exchange Commission civil case against Gupta, and to the criminal case against Rajaratnam.

But Goldman did not deserve all it sought, the judge said…..”

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