Gupta Case Goes To Jury

Jun 14 2012 | 12:45pm ET

The judge in the Rajat Gupta trial handed the former McKinsey & Co. chief’s fate to the jury, after lawyers for both sides sparred in closing arguments.

Deliberations are under way at the lower Manhattan courthouse, with four men and eight women mulling six counts of conspiracy and securities fraud against Gupta, who is accused of passing confidential information to Galleon Group founder Raj Rajaratnam. If convicted, the former Goldman Sachs and Procter & Gamble director could face decades in prison.

Yesterday, prosecutors and Gupta’s defense lawyers spent six hours summing up their cases. Assistant U.S. Attorney Richard Tarlowe called the evidence against Gupta, which included taped phone calls and Galleon trading records, “overwhelming” and “devastating,” while Gupta’s chief lawyer, Gary Naftalis, derided the government’s case for its lack of “real, hard, direct evidence.”

“Where’s the beef in this case?” Naftalis asked. “We have had no real first-hand knowledge of the crimes alleged to have been committed here.”

Not so, according to Tarlowe.

“Gupta abused his position as a corporate insider by providing secret information to his longtime business partner and friend, Raj Rajaratnam, so Mr. Rajaratnam could use that information to buy and sell stocks before the investing public,” he said. “By doing so, Gupta enabled Rajaratnam to make millions of dollars.”

“Time and time again Gupta betrayed that trust and violated that duty by using the secret information to help Rajaratnam cash in on at.”

As for the defense’s claim that there’s no evidence, Tarlowe pointed to one of the government’s primary counts against Gupta, that he gave Rajaratnam advanced warning of Berkshire Hathaway’s 2008 investment in Goldman. He said that Galleon bought 200,000 of the bank’s shares after an “urgent” call to Rajaratnam’s direct line.

“And that call was from Gupta,” he said. “That evidence is devastating.”


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

The U.S. Commodity Futures Trading Commission (CFTC) ordered The Goldman Sachs Group Inc., and Goldman, Sachs & Co. to pay a $120 million penalty for attempted manipulation and false reporting of ISDAFIX Benchmark Rates, a global benchmark for interest rate products.