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The Boston Globe

Business

Ex-Goldman director sentenced to 2 years in trading case

NEW YORK — Rajat K. Gupta, the former Goldman Sachs and Procter & Gamble director, was sentenced to two years in prison Wednesday for leaking boardroom secrets to former hedge fund manager Raj Rajaratnam.

Gupta, 63, who ran the consulting firm McKinsey & Co. and served as a top adviser to the foundations of Bill Gates and Bill Clinton, is the most prominent figure to face prison in the government’s sweeping crackdown on insider trading.

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He was also ordered to pay a $5 million fine.

The US attorney in Manhattan, Preet Bharara, said of Gupta, ‘‘His conduct has forever tarnished a once-sterling reputation that took years to cultivate.’’

The Justice Department’s campaign has reached onto the trading floors of some of Wall Street’s largest hedge funds and inside the most revered boardrooms of corporate America. Over a three-year stretch, more than 70 traders, bankers, lawyers, and corporate executives have been convicted of insider trading crimes.

Judge Jed S. Rakoff of US District Court in Manhattan handed down a more lenient prison sentence than the eight to 10 years stipulated by nonbinding federal sentencing guidelines.

A graduate of Harvard Business School, Gupta rose swiftly through the ranks of McKinsey and headed the firm for a decade. He was a trusted adviser to captains of industry, including Henry R. Kravis of the private equity firm Kohlberg Kravis Roberts & Co. and Peter R. Dolan, the former chairman of Bristol-Myers Squibb. He has also played a leading role in organizations fighting diseases in poverty-stricken nations.

Gupta is one of 23 people criminally charged in a seven-year insider trading conspiracy orchestrated by Rajaratnam, who was convicted in 2011.

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