Federal Judge Calls SEC's Gupta Move 'Bizarre'

Mar 17 2011 | 1:37pm ET

The Securities and Exchange Commission's administrative action against former McKinsey & Co. chief and alleged Raj Rajaratnam tipster Rajat Gupta is "bizarre," a federal judge said yesterday.

U.S. District Judge Jed Rakoff, not known for pulling his punches, asked SEC lawyer Valerie Szczepanik about Gupta's case at a hearing in the SEC's case against former Galleon Group trader Adam Smith, who has pleaded guilty and is cooperating with prosecutors.

"I don't understand why Mr. Gupta is the subject of an administrative proceeding before the SEC while everyone else is the subject of a proceeding before a district court judge," Rakoff said.

The decision to bring an administrative rather than an enforcement action in the Gupta case "was made by other above me," Szczepanik told Rakoff.

"What you said was not an answer to my question," the judge replied. "On its face, it's sort of bizarre, but there it is."

The hearing was the result of an SEC request to delay Smith's case until after Rajaratnam's ongoing criminal trial is over. Rakoff is also overseeing the SEC's lawsuit against Rajaratnam and has reluctantly agreed to delay that trial until after the criminal trial ends.

Rakoff said at the hearing that both sides in the Smith case have said they are in settlement talks.


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

With NFL season on the horizon, it’s time to take a look at our Fantasy Football value picks. Last year, we nailed it on Drew Brees, Jordan Howard, Frank Gore and Dwayne Allen. We missed pretty badly on Duke Johnson, Demaryius Thomas, Mohammed Sanu and Eli Manning.