Rajat Gupta to Appeal Against Insider Trading Conviction

New York
Rajat Gupta to Appeal Against Insider Trading Conviction

India-born former Goldman Sachs director Rajat Gupta will seek overturning of his insider- trading conviction in a US court today by arguing that the case rested exclusively on circumstantial evidence that relied on wiretap statements that did not involve him.

The US Court of Appeals for the Second Circuit in New York will hear arguments from Gupta, who was convicted last year of sharing corporate secrets and is on bail pending the appeal.

Gupta, in October last year, was handed down a two-year prison term by US District Court Judge Jed Rakoff, who also ordered him to pay a USD 5 million fine.

He was ordered to serve a year of supervised release after the end of his prison term.

Gupta, 64, had been scheduled to surrender on January 8 this year to start a two-year prison sentence. But after hearing arguments from Gupta's lawyer and prosecutors, Gupta won a major reprieve in December last year after Circuit Court of Appeals here granted his request to stay out of prison on a USD 10 million-bond while he fights his conviction.

Gupta was convicted in June last year of leaking Goldman boardroom secrets to Sri Lanka-born Raj Rajaratnam, the Galleon Group hedge-fund manager at the center of a US government crackdown on insider trading over the past four years.

Gupta's lawyer Seth Waxman had said the prosecution's case rested exclusively on circumstantial evidence and predominantly on wiretap statements, which were not made by Gupta but by Rajaratnam, who is a "highly unreliable declarant, speaking with other people with no connection to Gupta".

He had said the district court was wrong in admitting the hearsay wiretap statements, which Gupta could not cross-examine given Rajaratnam's unavailability.

Rajaratnam is currently serving an 11-year prison term after being convicted of running one of the largest insider trading schemes in US history.

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