When it comes to wiretaps, Rajat Gupta cannot win.
Gupta, the former McKinsey & Co. head charged with passing confidential tips to Galleon Group founder Raj Rajaratnam, lost his pre-trial bid to have the wiretaps at the heart of the prosecution’s case thrown out. Now, he’s lost a bid to play a pair of taped phone calls of his own.
U.S. District Judge Jed Rakoff called the tapes, which allegedly include Goldman Sachs banker David Loeb tipping Rajaratnam about two other companies, “blatant hearsay.” Prosecutors have not accused Gupta of tipping Rajaratnam about Intel Corp. or Apple Inc., the companies that Loeb allegedly told Rajaratnam about.
“There is substantial evidence that supports the argument that Mr. Loeb could’ve been the source of the Goldman tips” that prosecutors say Rajaratnam got from Gupta, lawyer David Frankel said. “The tapes could tell the story that Loeb gets the information, which is confidential to Intel, and he reaches out to Mr. Rajaratnam.”
“This is an attempt to prove an alternative view of the underlying facts and blatant hearsay,” Rakoff wrote in the preliminary ruling. He invited Gupta’s defense team to submit a legal brief on the issue before he makes his decision final.
Without the tapes, the defense is prepared to rest, having called Gupta’s daughter and several friends to the stand as character witnesses yesterday. Gupta’s daughter, Geentanjali, who worked at Harvard Management Co., will resume her testimony today.
“I have always observed since my childhood days that Rajat is straightforward, direct, truthful and inspires trust,” former World Bank official Anil Sood told the jury. “I have seen him consistently demonstrate these values.”