Thursday, 31 July 2014
Last updated 5 hours ago
Jan 23 2013 | 12:16pm ET
The U.S. Second Circuit Court of Appeals is going to become very well-versed in the law of wiretaps.
The New York federal appeals court, which heard Raj Rajaratnam's appeal of his insider-trading conviction in October, on Friday got the appeal of former McKinsey & Co. chief Rajat Gupta, convicted of passing tips to Rajaratnam. And as Rajaratnam's lawyers did, Gupta's lawyers plan to attack the wiretaps used by prosecutors during the trial.
Gupta was convicted of tipping Rajaratnam about Goldman Sachs and Procter & Gamble, on whose boards he served. Prosecutors had little of Gupta on tape, and did not have any of the allegedly crucial phone calls, but did use recordings of Rajaratnam talking about the information he allegedly received from Gupta.
Gupta's lawyers plan to argue that Rajaratnam's taped statements are hearsay and those of "a known fabulist."
"Without a proper basis for admission, these untestable, unreliable hearsay statements had no place in a criminal trial, and their admission alone compels reversal," Gupta's lawyers wrote.
Gupta's legal team will also attack U.S. District Judge Jed Rakoff's decision to cut off Gupta's daughter's testimony about her father's relationship with Rajaratnam. Geetanjali Gupta's full testimony "would have led the jury to question whether Gupta had any motive to tip the man who had stolen millions from him."
Just about every insider-trading defendant in the recent crackdown has challenged the legality of the wiretaps if they were used. The Second Circuit has not yet ruled on Rajaratnam's appeal.
Gupta remains free on bail pending appeal; if he fails, he'll spend two years in prison.
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…