New York: Evidence in the insider-trading case against businessman Rajat Gupta is “overwhelming,” a prosecutor told jurors at the trial’s close on Wednesday, saying Gupta helped hedge fund manager Raj Rajaratnam make millions through secret stock tips.
Gupta’s lawyers argued the former Goldman Sachs Group Inc board member had no reason to illegally leak information to Rajaratnam and that the government’s case is circumstantial. A lawyer for Gupta will deliver the defense summation later on Wednesday in the US District Court trial in Manhattan.
“Rajat Gupta abused his position as a corporate insider by providing secret company information to his longtime business partner and friend Raj Rajaratnam, so Mr Rajaratnam could use that information to buy and sell stocks before the investing public,” federal prosecutor Richard Tarlowe said.
“By doing so, Gupta enabled Rajaratnam to make millions of dollars,” he said.
Prosecutors say Gupta, 63, passed tips to Rajaratnam including the $5 billion investment boost for Goldman by Warren Buffett’s Berkshire Hathaway in 2008, at the height of the financial crisis. They say Gupta also leaked confidential information when he was on the board of Procter & Gamble.
Rajaratnam, founder of the Galleon Group hedge fund and a one-time billionaire, was convicted in the same courthouse last year and is serving an 11-year prison term.
“Time and time again Gupta betrayed that trust and violated that duty by using the secret information to help Rajaratnam cash in on it,” Tarlowe told the jurors. “The evidence against Gupta is overwhelming.”
To win a conviction, prosecutors have the burden of proving beyond a reasonable doubt that Gupta defied his duties to the companies and that he had something to gain from tipping Rajaratnam.
Gupta is a retired head of the McKinsey & Co business management consultants. He joined Goldman’s board in 2006 and left in May 2010, seven months after Rajaratnam’s arrest. He also is a former director at American Airlines Corp.
He faces a maximum possible prison sentence of 25 years if convicted on the charges of securities fraud and conspiracy.
Before trial summations started on Wednesday morning, Gupta kissed and embraced his eldest daughter, Geetanjali Gupta, who testified on behalf of her father on Monday and Tuesday. Gupta’s wife, Anita, and his four daughters have been a regular presence in the courtroom throughout trial, now in its fourth week.
Jurors in the trial have heard about Gupta’s humble beginnings in India and his rise to the upper echelons of the global corporate elite. They also heard from prosecution star witness Lloyd Blankfein, the Goldman Sachs chief executive. Blankfein, who also testified against Rajaratnam last year, said all discussions at board meetings were confidential.
The case is USA v Gupta, US District Court for the Southern District of New York, No. 11-907.