Today, confessed insider trader Rajiv Goel got off with two years probation from U.S. District Judge Barbara Jones, reports Bloomberg. For material information he had leaked to Galleon Hedge Fund regarding his employer Intel, Goel could have gotten decades in prison. However, he disclosed information about his dealings with Galleon head Raj Rajaratnam, now serving more than a decade in federal prison. Goel had been a personal friend of Rajaratnam, dating back when they were students together at Wharton.
Since cooperation is so well rewarded, will non-cooperation be brutally punished? The world, legal and business, is waiting for non-cooperative Rajat Gupta to be sentenced for insider trading mid next month. He declared his innocence - aggressively. Because he had been a pillar of the establishment, including heading McKinsey, he was one of the biggest fish caught up in the net of insider trading prosecutors.
Just as the feds might have sent a message today with Goel, they could also send another kind of message in the sentencing of Gupta.