(Adds Gupta reporting to prison)
By Joseph Ax and Jonathan Stempel
NEW YORK, June 17 Former Goldman Sachs Group Inc director Rajat Gupta on Tuesday began serving his two-year prison term for insider trading, and lost his challenge to a $13.9 million civil penalty and permanent ban from acting as a public company officer.
Gupta, 65, reported to FMC Devens, a medical facility and satellite camp in Ayer, Massachusetts about 40 miles (64 km) northwest of Boston, a spokesman for the Federal Bureau of Prisons said.
The former global managing director of the McKinsey & Co consulting firm began his term as the 2nd U.S. Circuit Court of Appeals separately rejected his claim that the fine and officer ban imposed in a separate U.S. Securities and Exchange Commision civil case was excessive.
A three-judge panel of that court concluded that U.S. District Judge Jed Rakoff, who oversaw the criminal and civil cases, acted within his discretion in imposing that punishment.
Seth Waxman, an attorney for Gupta, did not immediately respond to a request for comment on the ruling. SEC spokesman John Nester declined to make an immediate comment.
A jury convicted Gupta in June 2012 of passing confidential information he learned from Goldman board meetings, including a crucial investment from Warren Buffett, to Raj Rajaratnam, the onetime billionaire founder of the Galleon Group hedge fund.
Gupta is appealing his conviction. U.S. Supreme Court Justice Ruth Bader Ginsburg, who hears emergency appeals from the 2nd Circuit, last week denied his request to stay free on bail while he appeals.
Rajaratnam is serving an 11-year prison sentence, and is also being housed at Devens. The Supreme Court on Monday refused to hear his appeal of his conviction.
Rengan Rajaratnam, a former Galleon portfolio manager, went on trial on Tuesday in New York on charges that he engaged in insider trading with his older brother.
In his criminal case, Gupta was also ordered to make $6 million in restitution to Goldman and pay a $5 million fine.
Rakoff imposed the officer ban in the civil case despite finding at the criminal sentencing that Gupta was unlikely to commit future crimes.
Waxman had argued to the 2nd Circuit that Rakoff's positions were inconsistent, but the appeals court said the standard in a criminal context was different from that in a civil case.
The case is SEC v. Gupta, 2nd U.S. Circuit Court of Appeals, No. 13-3062. (Reporting by Joseph Ax and Jonathan Stempel; Additional reporting by Nate Raymond; Editing by Jonathan Oatis)