Saturday, Nov 01, 2014

Insider trading: Ex-Goldman Sachs director Rajat Gupta hauls apex court to avoid jail

Gupta, 65, convicted in 2012 of passing confidential board room information to his friend and business associate Raj Rajaratnam, is scheduled to begin his two-year prison term on June 17. ( Source: Reuters ) Gupta, 65, convicted in 2012 of passing confidential board room information to his friend and business associate Raj Rajaratnam, is scheduled to begin his two-year prison term on June 17. ( Source: Reuters )
Press Trust of India | New York | Posted: June 11, 2014 11:45 am | Updated: June 11, 2014 11:55 am

India-born former Goldman Sachs director Rajat Gupta has made a last-ditch effort to avoid going to prison next week on insider trading charges, asking the US Supreme Court to allow him to remain free on bail till his appeal for rehearing his conviction is decided upon.

Gupta, 65, convicted in 2012 of passing confidential board room information to his friend and business associate Raj Rajaratnam, is scheduled to begin his two-year prison term on June 17.

In a lengthy-118 page submission to Supreme Court Justice Ruth Bader Ginsburg, Gupta requested to remain free on bail, saying he is not a flight risk and if an appeals court rules in his favour, he will “likely” be entitled to a new trial.

Gupta “requests continuation of his release on bail pending the disposition of his petition for rehearing and rehearing en banc to the Second Circuit…and, if necessary, this Court’s disposition of his petition for a writ of certiorari,” his lawyers said in the submission made public.

Gupta had filed his petition for rehearing his case before the Second Circuit appeals court in April and the court is yet to act on that petition.

Ginsburg oversees emergency applications from New York, Connecticut and Vermont.

While she may herself rule on Gupta’s request, she could also refer it to a full, nine-member Supreme Court panel. There is no deadline for Ginsburg to rule on the submission.

Gupta’s team of lawyers, which includes former US solicitor general Seth Waxman, said if his bail is not continued, he would be required to report to prison next week despite satisfying the standards for bail pending appeal.

“If Gupta is forced to surrender before his certiorari proceedings are resolved, there is a high likelihood that, were this Court to grant certiorari, Gupta will have served at least half of his two-year sentence before the Court issues its decision,” the submission said.

The Harvard-educated Gupta is one of the most high-profile Wall Street executives to be convicted of insider trading, charges that were brought against him by Manhattan’s India-born top federal prosecutor Preet Bharara.

Apart from the two-year prison term, Gupta has been ordered to pay USD five million in fine and a separate USD six million in restitution to Goldman Sachs.

In his submission to the apex court, Gupta said the wiretaps of Rajaratnam’s telephone used by the prosecution as the most powerful evidence against him in his trial were improperly admitted.

He said if any of the wiretaps should have been suppressed, the court is likely to reverse his conviction.

He further argues that evidence of his good character was “critically continued…

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