India-born former Goldman Sachs director Rajat Gupta has asked a US appeals court to overturn a court’s ruling that he pay a hefty $13.9 million fine in the insider trading case and sought reversing a life ban on him from serving as director of a public company.

In a brief filed in the US Court of Appeals for the Second Circuit on Monday, Gupta’s lawyers argued that the district court “abused” its discretion in imposing the statutory maximum civil penalty on Gupta of $13.9 million, which is triple the benefit hedge-fund manager Raj Rajaratnam had obtained from the tips Gupta allegedly passed on to him.

The lawyers said the penalty was excessive in light of Gupta, 64, already facing a $5 million fine and two year prison sentence in a parallel criminal insider trading case.

“In fixing the amount of Gupta’s civil penalty, the court failed to consider — as it was required to do — the deterrent effect of the other penalties it had imposed...

“And without even considering the deterrent effect of the substantial criminal sentence it had already imposed, the court further ordered Gupta to pay the statutory maximum civil penalty of $13.9 million — even though Gupta himself never traded on the information and made no money from any of the trades,” the lawyers said.

The district court had also permanently barred Gupta from associating with brokers, dealers, and investment advisors, permanently enjoined him from future violations of the securities laws, and permanently barred him from serving as an officer or director of a public company.

Gupta’s lawyers argued that the district court abused its discretion in fashioning the permanent injunctions and fixing the civil penalty, and its “imposition of these remedies should be reversed.”

“Instead of protecting the investing public, these injunctions serve only to punish and stigmatize Gupta,” his lawyers said.

“There is no permissible justification for the three permanent injunctions imposed on Gupta. Imposing permanent injunctions without a permissible justification was an abuse of discretion, and the order of injunctive relief should be reversed.”

Harvard-educated Gupta was indicted in October 2011 and charged in a superseding indictment with one count of conspiracy and five counts of securities fraud.

A jury convicted Gupta of conspiracy and three counts of securities fraud, and acquitted him of the two remaining counts of securities fraud in June 2012.

Gupta has appealed against his conviction and is awaiting the decision of the appeals court while on bail.

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