Gupta Blasts Wiretaps In Appeal

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.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...