Goldman’s Gupta and Letters From His Friends

In preparation for his sentencing before SDNY Judge Jed Rakoff on October 24th for insider trading, or more particularly, feeding his pal, Galleon head Raj Rajaratnam some inside poop, Goldman Sachs’ Board Member Rajat Gupta has asked a few of his dearest friends to write letter on his behalf.  His friends, however, are not like my friends. Or probably yours, either.

From the WSJ Law Blog :


Many have come from well-known figures, as the Wall Street Journal reported Friday, including Bill Gates, Kofi Annan  and Deepak Chopra. 

And that’s not all.  The question is whether letters from luminaries help to sway a judge toward leniency, or perhaps make it even more clear that this is a send-a-message sentence because of the very important people watching. 

The submission of letters from family and friends developed alongside the sentencing guidelines as a means of humanizing a defendant under a sentencing regimen that completely eliminated any bit of humanity and replaced it with a grid.  It’s virtue remained even as the Supreme Court held the Sentencing Guidelines to be, well, guidelines in Booker.

Still, the efficacy of letters included with the defendant’s sentencing submission remains a tricky thing. A fairly prominent, though totally misguided, notion is that by collecting letters from the most important people a defendant can find will somehow influence a judge to be kinder, as if getting a nod from some important person will show the judge that “the fix is in.”  The defendants believe that this is how the “official government” game is played, and so they want to play it as best they can.

For many defendants, the closest they come to anybody of prominence is a local elected official.  While the official may barely know them, if at all, the defendant may have someone within reach who can needle a letter out of the official.  The letters are invariably worthless, as they inform the judge of nothing about the human being and suggest only that the defendant hopes to exert some “influence.”  The judge doesn’t care.

Then there’s the parish priest, in whatever religious flavor one prefers, who offers that the defendant regularly attends church.  This too offers little to commend the defendant, and at best adds a bit of heft to an otherwise light life.

Notably, Rajat Gupta’s letters include some very enlightening substance about the person, the stuff that a judge ought to know before condemning a person to prison.



His wife Anita, for instance, wrote:



He invested with anybody who came to him or was sent to him by friends without asking too many questions much to our financial advisors dismay. He could never imagine his friends or business associates could be involved in unlawful activities or would try to cheat him…. During the present crisis, a lot of his “good friends” have disappeared or cooperated against him in the hope of getting leniency and some who could be helpful did not step forward.

This provides insight into the person behind the crime, his motives, his goals, how an otherwise good and charitable man ended up standing before a jury when the foreman said “guilty.” 

The working assumption in financial crime cases is that the defendant was motivated by greed, personal financial gain.  To a judge, that means that the defendant put his interests above those of society, and that provides justification for society to punish him.  In this case, Gupta gained nothing for himself. Indeed, it’s not like he was hungry for much, doing pretty well on his own at Goldman. 

As is almost always the way, everybody loves the guy making huge bucks and running around in fancy circles.  But when trouble happens, especially trouble that’s contagious like a criminal investigation and prosecution, the once-loved guy suddenly looks ugly and the one-time friends flee like rats.  They explain that they have to lest they get swept up or, worst still, share a prison cell.  That’s how rats think (Note: Most Biglaw “white collar” defense lawyers call them “cooperating witnesses” because that’s what they learned in AUSA school, where they were indoctrinated into the Cult of Cooperation).

But Gupta isn’t entirely friendless, still having Bill, Deepak, Kofi and others in his corner.  Should he not be allowed to have friends who think well of him?  Should he not be allowed to have friends who, as it happens, are fabulously wealthy and prominent?  Is that a crime too?

The question of whether letters from luminaries will backfire is an interesting one, as it depends on the send-a-message trope.  Perhaps the best reaction is that it’s long past time to retire the rationale, both because it doesn’t work, despite scholarly and “common sense” theories to the contrary, and it punishes people for factors beyond their control. 

Fortunately for Rajat Gupta, he’s before Judge Jed Rakoff, who has shown a deeper understanding of the parsimony clause than others who can’t let go of the comfort of the Sentencing Guidelines.  As the letters reflect, Gupta was a generous person when he didn’t have to be and had no conceivable reason to think it might come in handy some day if he should ever be sentenced for a crime.  No, he did some very decent things in his life for no better reason than he was a decent man.  And his crime, frankly, just isn’t that big a deal, and certainly wasn’t committed for his personal, nefarious benefit.

So he’s pals with Bill, Deepak and Kofi.  Who wouldn’t be if they ran with that sort of crowd.  It doesn’t make him a bad person, and provides no cause to seize the opportunity to enhance his punishment any more than not being friends with Bill, Deepak and Kofi gives a reason to diminish it. Even rich guys should be sentenced to no more than the law says is necessary to serve its legitimate ends, no matter who he’s friends with.














10 comments on “Goldman’s Gupta and Letters From His Friends

  1. A Voice of Sanity

    Isn’t his real crime being bad at what he was accused of? If his friend had read off a list of corporations and Gupta had, say, started whistling Beyoncé’s “Single Ladies” when his friend got to one, could he still have been found guilty?

    That’s what amazes me about the ‘geniuses’ on Wall Street who get caught. It’s easy to avoid if you set it up right, a point made so amusingly by Dr. Peter Clyne decades ago. And yet these clucks get nailed like the dumb employee who pockets the customers’ money!

  2. Alex Bunin

    Letters of reference are tricky in all situations. As an employer, I have received unconvincing testimonials from high ranking officials who appeared to know little about the applicant. At sentencing, I have seen Gulf War veterans hammered by judges who fought in WW II and thought they were crybabies to even mention their service. Sometimes less is more.

  3. j a higginbotham

    Are there any general rules about the convicted showing (or pretending to) remorse?
    Especially if someone knows/feels he was falsely convicted?
    Are there different responses for trial/sentencing?

    Or is this just something else that really requires a great deal of thought and discretion?

    just curious

  4. SHG

    This question arose with Sandusky recently, and comes up fairly regularly. It presents a problem, since “showing remorse” is itself problematic, and addressing the problem of maintaining innocence in the face of being sentenced when lack of remorse will likely be a negative factor can be very difficult.

    Again, it’s got to be dealt with on a sui generis basis, with thought and discretion.  There are a lot of things that just require a great deal of thought and discretion. It’s not easy and there isn’t a “trick” to deal with everything.

  5. SHG

    The way they get caught is somebody downstream rats them out. It doesn’t matter how smart they are. A chain is only as strong as the weakest link. When the weak link breaks, that’s it, even for the smart guys.

  6. Jesse

    The justice department has criminalized all manner of conduct under the banner of “insider trading” that was once-upon-a-time perfectly legal. I hope the guy gets off scot free.

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