Insider trading: Kumar avoids jail for cooperation with govt
NEW YORK: Indian-American former Mckinsey partner Anil Kumar, whose “extraordinary” cooperation led to the conviction of Wall Street tycoons Raj Rajaratnam and Rajat Gupta for insider trading, has been spared jail time.
53-year-old Kumar, was, however, sentenced to two years probation on securities fraud charges and ordered to pay a USD 25,000 fine and forfeit USD 2.26 million by US Circuit Court Judge Denny Chin in Manhattan on Thursday.
Earlier, federal prosecutors, in a letter to the court, had described Kumar’s cooperation in the insider trading case as “nothing short of extraordinary.”
“Kumar’s cooperation with the Government was absolutely essential in two of the most important securities fraud trials in history,” the letter said, referring to the trials of former hedge-fund manager Raj Rajaratnam and Rajat Gupta, a former director at Goldman Sachs Group Inc. Both were found guilty in the case.
Kumar faced a maximum prison sentence of 20 years but was given a lenient sentence due to his extensive cooperation with the government.
“I stand in this court … completely and totally shamed by the conduct that has brought me before your honor,” Kumar said at his court hearing. “I strayed from my core beliefs that I stood for all my life.”
Judge Chin on Thursday said: “I am persuaded that this was aberrational conduct and that Mr Kumar has led a law-abiding and productive life.”
“I am persuaded he cooperated not to get a lighter sentence but to make amends for what he did,” he said.
Prosecutors had told the judge that Kumar had earned leniency with his willingness to come clean about his misdeeds.
“Kumar’s significant, powerful, and timely cooperation has provided substantial assistance to the Government in the investigation and prosecution of two of the most high-profile defendants convicted of illegal insider trading in history,” the prosecutors said.
Kumar was arrested along with hedge fund founder Rajaratnam in October 2009 and had pleaded guilty in 2010 to one count of conspiracy and one count of securities fraud.
A day before his sentencing, court papers submitted by Kumar’s lawyers were unsealed in which he had sought probation for his cooperation in the government’s crackdown on insider trading on the Wall Street. -PTI