The SEC said the district court was right in ordering that Gupta pay the maximum statutory civil penalty.

"Contrary to Gupta's contentions, the district court did consider whether to reduce the civil penalty in light of penalties imposed in the prior criminal case, but exercised its discretion to decline such a reduction."

SEC's lawyers argued that "specifically, the court found that Gupta had violated the securities laws with a high degree of scienter, that his violations were egregious, repeated, and resulted, in effect, in millions of dollars of losses to those who traded their stock without the benefit of Gupta's inside information, and that Gupta's current financial condition does not counsel against the imposition of a civil penalty of the level that the SEC seeks."

"The district court considered Gupta's argument that a treble penalty is inappropriate in light of the criminal penalties already imposed but concluded that imposition of an additional civil penalty is called for here in order to effectuate Congress's purpose of making insider trading a money-losing proposition, both for Gupta and for those who would consider it," the SEC said.

The SEC said that imposing the maximum civil penalty is justified as it will ensure a "meaningful deterrent" effect given Gupta's wealth, and the aggravating facts that his tipping arose from his role in the securities industry and resulted in substantial investor losses."
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