Jury saw me as a wealthy, successful immigrant: Rajat Gupta

McKinsey’s youngest MD at age 45, who served a prison sentence for insider trading, says jury didn’t understand financial crimes

March 25, 2017 08:56 pm | Updated 09:55 pm IST - NEW DELHI

Challenges ahead: Rajat Gupta, who was released from prison last year, is still facing a legal battle in the U.S.

Challenges ahead: Rajat Gupta, who was released from prison last year, is still facing a legal battle in the U.S.

Former Mckinsey CEO Rajat Gupta blamed his two-year prison sentence over insider trading charges on an overzealous public prosecutor (recently ousted Manhattan Attorney Preet Bharara) with political ambitions and a jury that didn’t understand the charges but assumed he was guilty on account of being a wealthy and successful ‘immigrant.’

“Unfortunately, I got caught in the crosshairs between a very politically ambitious prosecutor, the sign of the times and also, a judicial system and a system of juries that don’t really understand necessarily sophisticated financial crimes,” said Mr. Gupta, who was released from prison last year and is still facing a legal battle in the U.S., opening up for the first time about his case as well as his experience as an inmate on Saturday.

“In insider trading, what I was convicted of, you have to have three things – evidence of actual information passed, actual benefit, and motive or intent. In my case, there was no direct evidence. This is all hearsay. There was absolutely no benefit, and they admitted there’s no benefit – I never traded and never gained anything,” he said.

‘Can’t establish intent’

While the prosecutors could never establish intent, Mr. Gupta said, “Those were the times when – you know there was a jury of twelve people who never understood any of the nuances and they saw a successful immigrant and basically said, ‘Oh he’s a wealthy guy… must have done something wrong.”

Mr. Gupta conceded that he wouldn’t have faced this trouble over allegations of sharing information he had access to as a member of the Board of Directors of Goldman Sachs, with Raj Rajaratnam, the founder and former head of the Galleon Group, if he was more careful about whom he trusted.

“I am fundamentally trusting of everybody. I believe in the goodness of people and I am simply not careful and that, off and on, gets me into trouble.

“Certainly, all this trouble was because I trusted people. I wouldn’t live life in a very different way but if I were to fault myself, I would say I trust too many people,” he remarked.

Mr. Gupta, the youngest managing director at Mckinsey at the age of 45 after graduating from IIT Delhi and Harvard Business School, said it was difficult to fully articulate his feelings about his time in prison, but shared a letter he wrote to his friends ahead of his release, while speaking at the Young Indians national annual summit hosted by the Confederation of Indian Industry in the capital.

Prison memoirs

“Improbable as it sounds, the overall experience was far more positive than I would have imagined and while I would not have volunteered for it, my life is richer for having gone through the experience,” Mr. Gupta wrote on January 1, 2016, recalling the friends he had made in prison, from whom he learnt new card games, the art of writing poetry, racquet-ball, different cuisines (including Puerto Rican) even as he rekindled his love for chess after a gap of 50 years.

“In the last 18 months, I lived in 3 different facilities, nine months in a low security prison, two months in solitary confinement and seven months at the main prison. As a result, there were a great variety of living situations, experiences and people I encountered,” he noted.

‘Learnt new skills’

“In addition to reading, meditating, and writing a new book, I learnt many new skills including some new card games like Spades, which I never played before. I even learnt some new hood (Black slang) language… Overall, I am glad to be leaving here, but I had a good time. In a very strange way, I will miss the place including the colourful characters such as the transgender person who is named Kardashian whose sex life and extra-curricular activities in the Boom Boom room are a subject of great speculation and gossip,” he said.

“There were a few experiences that I will never forget, such as the first gay couple who wanted to get married despite the reticence of the regime in the prison. One of them asked me to contact Anderson Cooper of CNN to do a story on them to pressure the regime to allow them to marry.

“It turned out that one of the men was not gay at all. It was a ruse employed in order to get transferred to some other facility,” Mr. Gupta recalled.

The biggest challenge for India is how to utilize the population dividend of a large young working age population, he said.

Mr. Gupta said he plans to continue to invest his time ‘going forward’ in the areas of health and education, which are “woefully inadequate.”

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