Gupta Trial Delayed As Sides Squabble Over Charges, Evidence

Feb 8 2012 | 3:17pm ET

It promises to be an interesting three-and-a-half month run-up to Rajat Gupta's insider trading trial, as both sides continued to bicker and prosecutors promised additional allegations against the former McKinsey & Co. chief.

Gupta pleaded not guilty to a superseding indictment against him filed last week, adding a new insider-trading charge stemming from a March 2007 Goldman Sachs board conference call, confidential information from which he allegedly leaked to Galleon Group's Raj Rajaratnam. Prosecutors said they are continuing their investigation and may add further charges, although Rakoff said he wouldn't allow them.

But Gupta's legal team won its own victories yesterday, gaining a delay in the start of the trial from April 9 to May 21 to allow them to prepare, and possibly a big piece of reasonable doubt come trial.

Rakoff said yesterday that prosecutors disclosed that Rajaratnam may have had another insider at Goldman, where Gupta served as a director. That source, known as "Mr. X," did not offer tips on either Goldman or Procter & Gamble, another company on whose board Gupta served and about which he is alleged to have tipped Rajaratnam, but Rakoff pushed prosecutors to identify him. Meanwhile, Gupta's lawyer is preparing to demand documents from prosecutors and the Securities and Exchange Commission at a Feb. 16 hearing.

While Rakoff said the trial will move ahead on May 21 "barring an act of God," prosecutors said they "hope to get more time to get more charges against Mr. Gupta." But with Rakoff's opposition to another superseding indictment, prosecutors said they will push to admit evidence of the alleged crimes they stem from at the trial.

"What the government is doing here now is wildly expanding what everybody in the world believed the case to be about," Gupta lawyer Gary Naftalis said. "I really think it's quite unfair."

"It's time for them to stop and try the case they brought," he added.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.