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Ex-McKinsey Boss Gets Two Years in Prison

Gupta was convicted of three counts of securities fraud and conspiracy in June after a four-week trial

Former Goldman Sachs director Rajat Gupta, 63, who was head of mighty McKinsey consultancy from 1994-2003 where he was privy to the most sensitive corporate information, was sentenced Wednesday to two years in prison for insider trading. He also has to pay a $5 million fine.

Gupta was the high-ranking fish to be caught in the great Raj Rajaratnam insider trading ring that was busted up by government wiretaps.

He no sooner put down the phone after a conference call among the Goldman Sachs board approving a $5 billion investment from Warren Buffett than he called Rajaratnam to debrief. Within seconds Rajaratnam bought $40 million worth of Goldman stock. It was the height of the financial meltdown.

Gupta was convicted of three counts of securities fraud and conspiracy in June after a four-week trial.

He volunteered to go to Africa to work among the poor and the HIV infected to escape prison and got Bill Gates and former United Nations Secretary-General Kofi Annan to plea with the court for leniency.

He could have gotten eight to 10 years. The judge called his abuse of position "disgusting."

He has advised Gates and former President Bill Clinton on their foundations and served of the boards of Proctor & Gamble and American Airlines before he was forced to step down.

Rajaratnam, the founder of the now defunct Galleon hedge fund, is doing an 11-year stretch.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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