A US court has slapped former Goldman Sachs director Rajat Gupta with a hefty civil fine, and a ban from working as an officer at a public firm in the future, after he illegally traded in on company secrets.
US District Judge Jed Rakoff in Manhattan, who also oversaw Gupta's related criminal trial last year, ordered Gupta to pay a $13.9m (€10.6m, £9.2m) civil penalty.
Gupta has already been hit with two years imprisonment last year, alongside a $5m criminal fine, following a conviction. He was found guilty of sharing confidential information about Goldman Sachs, which he gathered at board meetings in late 2008, and P&G earnings with former hedge fund manager Raj Rajaratnam.
Rajaratnam, also the billionaire founder of Galleon Group, is currently serving an 11-year prison sentence.
However, Gupta remains free while he appeals his June 2012 conviction.
Securities and Exchange Commission's Case
The US Securities and Exchange Commission (SEC) took Gupta and Rajaratnam to court over insider trading allegations last year.
The illegal trading tips included information about Goldman Sach's financial results and a pivotol $5bn investment by Warren Buffett's Berkshire Hathaway during the financial crisis.
"The sanctions imposed today send a clear message to board members who are entrusted with protecting the confidences of the companies they serve," said George Canellos, co-director of the SEC's enforcement division, in a statement.
"If you abuse your position by sharing confidential company information with friends and business associates in exchange for private gain, you will be prosecuted to the fullest extent by the SEC."
Last month, Rajaratnam's counsel tried to argue that wiretap evidence was illegally used to convict him. However, the objection was rejected by the federal court in New York.
In the similar fashion, Gupta also argued before the same court in May that wiretap evidence must be removed from his trial as well.
The court heard several wiretapped conversations, where in one, Rajaratnam said "something good might happen to Goldman" to a trader, prior to the Berkshire Hathaway investment.
Insider Trading crackdown
Gupta's conviction is the latest in a long line of people those have been caught in the insider-trading cases by the SEC.
Around 69 people have been charged with the crime since October 2009 while 63 of those have been convicted.
Rajaratnam, Sri Lankan born Galleon Group founder, is the highest ranking financial executive to be convicted in a multi-year federal crackdown on insider trading case.
Gupta is the top ranking corporate executive to be convicted in that investigation.
In 2011, SEC won a $92.8m civil penalty against Rajaratnam, and asked him to pay penalty of more than $53.8m with an additional fine of $10m in the criminal case.