Prosecutors, Gupta Lawyers Fight Over Impending Trial

May 17 2012 | 9:57am ET

With less than a week to go before trial, prosecutors and Rajat Gupta's lawyers continue to spar over what a jury will and will not be allowed to hear.

The two sides traded requests and counter-requests on the wiretaps at the center of the case, Gupta's charitable works and reputation, his potential prison sentence and conversations between the former McKinsey & Co. chief and his lawyers.

Gupta is scheduled to stand trial on Monday on charges that he passed confidential tips about two companies he served as a director to Galleon Group founder Raj Rajaratnam. Rajaratnam was convicted on insider-trading last year and sentenced to 11 years in prison.

Prosecutors have asked U.S. District Judge Jed Rakoff to bar Gupta's lawyers from discussing his charitable work, the damage done to his reputation by the charges against him and the government's motives for bringing the case against him. They also asked Rakoff to block the defense's use of any privileged conversations with his lawyer—unless they produce all of them.

Gupta's lawyers, not surprisingly, think that the U.S. Attorney's Office is asking for a bit much.

"The government attempts to hamstring the defense," his lawyers told Rakoff. "Mr. Gupta's charitable activities are a large component of his background and a critical element of who he is as a person."

As for the requests for privileged attorney-client conversations, Gupta's lawyers said they were "extraordinary" and "totally unjustified." Prosecutors want to prevent Gupta from presenting evidence that he considered suing Rajaratnam over a soured joint investment in Voyager Capital Partners, which his lawyers say cost Gupta $10 million.

Prosecutors want other evidence about Voyager admitted, however: They claim that Rajaratnam boosted Gupta's stake in the fund by $4 million after Gupta spilled the beans about Goldman Sachs.

"The evidence at trial will show that Rajaratnam agreed to increase the value of Gupta's stake by approximately $4 million, and shortly after the July 29 call" between the two men "Rajaratnam had a Galleon employee send Gupta a letter, on Galleon letterhead, memorializing the increased value," prosecutors said.

The July 29 tape is also important for showing the "ease with which" Gupta passed confidential information to Rajaratnam.


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