NEW YORK (Diya TV) — Prosecutors argued that the pleas of former Goldman Sachs director Rajat Gupta to have his conviction of insider trading overturned be rejected. They’ve insisted Gupta received a fair trial and was convicted by an impartial jury for his “criminal conduct,” they told an appeals court.
Indian American U.S. Attorney for the Southern District of New York Preet Bharara wrote as such in a lengthy brief filed with the U.S. Court of Appeals for the Second Circuit filed this month. Gupta’s perpetual tipping of his business partner Raj Rajaratnam with material non-public information in “ways that furthered Gupta and Rajaratnam’s shared financial interests” remains “criminal” and he is “not actually innocent.”
He added Gupta’s appeals from an order denying his motion to vacate, set aside, or correct his sentence should be rejected and he is not entitled to the relief he seeks.
In May, the 66-year-old Gupta filed an exhaustive brief in the appeals court — he argued that the judgment of the Manhattan district court finding him guilty of insider trading “should be reversed” and his “conviction should be vacated.”
His appeal was filed in the immediate shadow of an historic ruling by the Manhattan appeals court that for an insider trading, prosecutors must show that a defendant received a personal benefit for passing illegal tips. Examples can be found in the reversals of a convictions of insider trading in hedge-fund managers Todd Newman and Anthony Chiasson in 2014, Gupta’s lawyers argued.
However, opining there is no legal basis to overturn the conviction, Bharara said the jury convicted Gupta for “repeatedly and brazenly” disclosing material non-public information to Rajaratnam in violation of the fiduciary duties Gupta owed to Goldman Sachs and Procter and Gamble, companies on whose boards of directors he served.
“This conduct, which was motivated by Gupta’s substantial financial entanglements with Rajaratnam and his multi-billion dollar hedge fund, is as criminal today as it was before Newman,” Bharara said.
“Gupta received a fair trial before a properly instructed jury; that jury simply agreed with the government’s evidence of guilt, rejected Gupta’s proffered defenses and convicted Gupta for the conduct he committed. There is no legal basis to disturb that verdict,” he said.
Bharara additionally noted that at no point did the District Court instruct the jury to convict Gupta based on a Newman-invalidated “mere friendship” theory of benefit.
“Indeed, the ‘friendship’ does not appear in the jury instructions at all. The District Court instead instructed the jury that tipping in furtherance of Gupta’s good and frequent business relationship with Rajaratnam would suffice under the law. Newman says nothing to the contrary,” he said.