Saturday, May 12, 2012

More On Rajat Before The Trial

To me, ideal justice should reward or punish a person in proportion to the net of all the good and bad deeds done over a lifetime.  In this "Judgement Day" sense society is enormously indebted to Rajat Gupta about whom I last wrote in March 2011.  The world is a better place because of his work at McKinsey and after, including with the Gates Foundation, the American India Foundation, and in his helping set up ISB, the best business school in India.  And this is in addition to his grace, generosity and goodwill towards those who came into personal contact with him.

Rajat allegedly leaked board meeting information that led to insider trading gains of up to a few million dollars cumulatively to his friend Rajaratnam, though none to Rajat personally.  Even if true this sum is dwarfed by Rajat's services to humanity that (if you can put a monetary value on them) are worth billions - or tens of billions - of dollars. 

Of course, our man made system of justice is of necessity a lot more limited, with no offsetting credits for unrelated acts. Even Mother Teresa would have been prosecuted if she had committed a robbery.  For proven offenses penalties are at most mitigated when the judge at the time of sentencing considers a defendant's good deeds.  All I'm saying is that I continue wishing the best for Rajat, and regardless of the outcome of his trial starting on May 21 he remains in my books an admirable and thoroughly decent human being.

Others who have interacted closely with Rajat seem to feel the same way. is a website established by friend and former McKinsey colleague Atul Kanaghat where folks of varying prominence have rallied to support Rajat. It contains several fervent testimonials and positive accounts from those who know him well.  Many people who are eager to cultivate relationships with celebrities abandon them just as quickly when they come under a cloud. Rajat in contrast having steadfast friends speaks well of both.

And then as his friends maintain, the allegations against Rajat may simply be untrue.  They are out of character with the person I know.  Rajat's defense team is expected to stress that (a) there is no direct evidence of Rajat's wrongdoing, (b) the timing of his calls to Rajaratnam does not mean that he leaked confidential information since he had many other matters to discuss, and (c) Rajat had just lost his entire $10M investment in Rajaratnam's funds which had strained their relationship so he'd hardly want to go out of his way to help Rajaratnam.

There are other developments.  AP reported on April 19 that prosecutors acknowledged Goldman employee(s) (not Rajat) also fed Rajaratnam inside information.  A May 3 article in the WSJ also described how Goldman's stock had been rising for several minutes even before Rajat called Rajaratnam and the latter made his "inside" trade, meaning that someone else had already leaked this information.  

Prof. Jagdish Bhagwati with whom I've co-written health care articles also has a sympathetic perspective as reported in the media about an Indian propensity to over-share that could cause problems. He said:

“You go to a meeting and you hear something which technically could be considered insider information and you go to your friend and you say ‘Arrey you know what happened?’  And he doesn’t realize - and that is Rajat’s bad judgment - that this guy is a crook. I think this is what may have happened. It is the product of Indian culture...  I think most people will see Rajat as somewhat of a victim. The fact that he has been doing a lot of good things for India and the Indian American community is going to stand in his favor. There will be cynicism among some people, but the vast majority will see him as a good man, who got caught on the wrong side of the street.”

Knowing what I do about Rajat and wanting to see justice served in a more holistic sense, I hope he gets through his crisis and regains universal acclaim for his achievements and innate decency.