Rajat Gupta seeks re-trial over insider trading case

Former Goldman Sachs Group Board of Director Rajat Gupta's attorneys asked the Judge to reverse his insider-trading conviction, saying wiretap evidence used by the prosecution should not have been introduced at trial stage.
Seth Waxman, lawyer for Gupta, told the 2nd US Circuit Court of Appeals in New York yesterday that wiretaps played for the jury were inadmissible because they amounted to hearsay evidence.
"Gupta himself was not heard on the wiretaps, which are instead conversations between convicted Galleon Group manager Raj Rajaratnam and other employees at the hedge fund. Those wiretaps should never have been admitted, Waxman told a three-judge panel.

"The prosecution's case rested exclusively on circumstantial evidence, and predominantly on wiretap statements - not of Gupta, but of Raj Rajaratnam, a highly unreliable declarant, speaking with other people with no connection to Gupta," Seth Waxman and Gary Naftalis, Gupta's lawyers said in a brief to the appeals court.
"The court's decidedly asymmetrical interpretation of the rules of evidence left the jury with a distorted picture in which Gupta was accused by the self-serving hearsay of a known fabulist beyond Gupta's powers to cross-examine, but was unable to explain to the jury that he had neither the motive nor the inclination to benefit that person," Waxman said.

Gupta, 64, 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.
Waxman and Naftalis argued that the conversation and a second wiretapped call were admitted erroneously under the theory that it furthered the insider-trading conspiracy because prosecutors didn't allege Lau was a member of the Rajaratnam-Gupta conspiracy and instead called it "inadmissible braggadocio".