NEW YORK: India-born former Goldman Sachs director Rajat Gupta has been ordered to pay USD 6.2 million for legal expenses incurred by his former employer during his trial in one of the biggest insider trading schemes in the US.
Gupta, 64, was sentenced to two years of imprisonment last year after he was convicted of leaking secrets about the company to his friend and business associate Galleon founder Raj Rajaratnam, who is serving an 11-year prison term.
Gupta, who is currently on bail while applying his conviction, was told to pay USD 6.2 million for legal fees to Goldman Sachs by federal Judge Jed Rakoff in New York.
Goldman had sought USD 6.9 million as reimbursement from former McKinsey head Gupta, which he did not contest in the court.
After reviewing the firm’s 542 pages of billing records related to the case, Judge Rakoff however cut the bill by 10 per cent noting that there were some extraneous entries in the 542 pages of billing records submitted by Goldman Sachs.
“On a few occasions the number of attorneys staffed on a task – while perhaps perfectly appropriate on the assumption that Goldman Sachs wished to spare no expense on a matter of great importance to it – exceeded what was reasonably necessary” under the statute, Rakoff wrote.
In 2008, Gupta’s net worth was USD 84 million.
The money that Gupta now has to pay Goldman is separate from the cost of his legal defense, which has thus far exceeded more than USD 30 million.
That legal tab has been paid for by Goldman because the banks bylaws require it to pay the legal fees of its top officers and directors. But under a deal reached before his trial, Gupta agreed that if he was found guilty of insider trading, he would reimburse the bank for the legal fees advanced to him, the New York Times reported.
A Goldman spokesman, Michael Duvally, said the bank was pleased the court ordered Gupta to pay it restitution.
A lawyer for Gupta said his client plans to appeal against the ruling.
-PTI
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