Wednesday, 24 August 2016
Last updated 6 hours ago
Dec 1 2011 | 11:43am ET
A federal judge has for the most part put the brakes on the Securities and Exchange Commission's lawsuit against former McKinsey & Co. head Rajat Gupta pending the outcome of Gupta's criminal trial.
U.S. District Judge Jed Rakoff, who is overseeing both cases, agreed to adjourn most of the civil case until the end of the criminal trial, expected in April. Prosecutors had argued that allowing Gupta to depose expected witnesses in the criminal case for his civil defense would give him a leg up.
Rakoff agreed. But he said that seven people, who either testified in the trial of Galleon Group founder Raj Rajaratnam or who are not expected to be called in the criminal trial, could be deposed, including Goldman Sachs CEO Lloyd Blankfein. Gupta served as a Goldman director, and Blankfein testified at Rajaratnam's trial that Gupta had passed confidential information about the bank to Rajaratnam.
Rajaratnam was convicted of insider-trading and sentenced to 11 years in prison. Gupta is accused of passing him information both about Goldman and about Proctor & Gamble, on whose board he also served.
Gupta's criminal trial is set to begin on April 9 with the civil trial to follow in October.
In addition to Blankfein, Gupta's lawyers were given permission to depose Galleon co-founder Gary Rosenbach and former Galleon trader Ian Horowitz.