Friday, 25 July 2014
Last updated 4 hours ago
May 18 2012 | 4:12am ET
The shape of former McKinsey & Co. chief Rajat Gupta's trial on charges that he passed confidential information to Galleon Group founder Raj Rajaratnam has come into closer focus with just days to go before its start.
Both sides submitted their potential witness lists to U.S. District Judge Jed Rakoff yesterday, as Rakoff dealt with several pre-trial motions dealing with what will and will not be allowed at Gupta's trial, set to begin on Monday. Among the matters that can be presented to the jury are four wiretaps involving Rajaratnam sought by prosecutors and opposed by the defense, and evidence of Gupta's philanthropic efforts sought by his lawyers. But Rakoff warned both sides that they were taking a risk.
The judge told prosecutors that they risked a mistrial if they failed to show that three tapes of Rajaratnam that do not directly involve Gupta are not "in furtherance of the conspiracy." Prosecutors, who plan to use the tapes in their opening statement, say the wiretaps show Rajaratnam telling others about tips Gupta gave him about Goldman Sachs, on whose board Gupta served.
The judge also said he'd allow prosecutors to use the one tape they have of a conversation between Gupta and Rajaratnam.
As for the defense, Rakoff said he'd limit the amount of time he'd allow them to spend on Gupta's charitable work—and warned that Gupta himself might have to testify if his legal team wanted to go into greater depth about it.
"If Mother Theresa were charged with bank robbery, the jury would still have to determine whether or not she committed a bank robbery," Rakoff said. The judge further lightened the mood by telling both sides he'd hear their challenges to his rulings "in the interest of wasting time."
Rakoff said 100 prospective jurors would be in court on Monday, and that he hoped opening statements could be heard the same day. In addition, prosecutors handed over a list of more than 50 possible witnesses—they said they would begin with Rajaratnam's former assistant—while Gupta's lawyers identified 116 possible witnesses.
The lists are star-studded. Both include Goldman's top two executives, CEO Lloyd Blankfein and President Gary Cohn. Prosecutors also said they might call Goldman director Jennifer Padovani and Steven Peikin, a lawyer who interviewed Gupta for Goldman. The government also included one current and one former executive at Procter & Gamble, another company Gupta served as a director that he is charged with tipping Rajaratnam about, and a whole host of Galleon-linked names, including Rajaratnam himself, Rajaratnam's brother Rengan, co-founder Gary Rosenbach, former trader Ian Horowitz and former portfolio manager Michael Cardillo. Former McKinsey partner Anil Kumar, who admitted to tipping Rajaratnam, is also on the list.
Cardillo and Kumar pleaded guilty in the Galleon case and are cooperating with prosecutors. Rajaratnam was convicted last year and sentenced to 11 years in prison.
The defense said it might call Berkshire Hathaway CEO Warren Buffett, self-help author Deepak Chopra, billionaire steel magnate Lakshmi Mittal and members of Gupta's family, the latter for limited testimony. Its list also includes Berkshire executive Ajit Jain, a longtime Gupta friend, and a Goldman director of their own, Claes Dahlback. Dahlback is expected to testify that Gupta told him after Rajaratnam's arrest that the Galleon founder was "a bad man" who had lost him money. That testimony would be part of Gupta's effort to show that his friendship with Rajaratnam had soured before he allegedly began passing him confidential information.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…