Preet Bharara asks court to deny Rajat Gupta’s plea to overturn conviction

Indian American former Goldman Sachs director Rajat Gupta’s latest bid to have his insider-trading conviction overturned should be rejected, prosecutors have told an appeals court here, asserting that he got a fair trial and the jury convicted him for his “criminal” conduct.

In a lengthy brief filed before the U.S. Court of Appeals for the Second Circuit this month, Indian American U.S. Attorney for the Southern District of New York Preet Bharara said Gupta’s conduct of repeatedly tipping 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.” Bharara said 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, Gupta, 66, had filed an exhaustive brief in the appeals court, arguing that the judgment of the Manhattan district court finding him guilty of insider trading “should be reversed” and his “conviction should be vacated.”
India-born former Goldman Sachs director Rajat Gupta, a free man now after a 2-year jail term on insider trading charges, has approached a US court to overturn his conviction, arguing that there is no evidence to show that he “received even a penny” for passing confidential boardroom information to his friend.

In an exhaustive brief filed in the Second Circuit Court of Appeals yesterday, 66-year-old Gupta’s team of lawyers argued that the judgement of the Manhattan district court finding Mr Gupta guilty of insider trading “should be reversed” and his “conviction should be vacated.”

Mr Gupta’s appeal comes on the back of a landmark ruling by the Manhattan appeals court that for an insider trading conviction prosecutors must show that a defendant received a personal benefit for passing illegal tips.

Mr Gupta’s lawyers have cited the ruling that led to the reversal of insider convictions of hedge-fund managers Todd Newman and Anthony Chiasson in December 2014.

“As this Court has noted, not every disclosure of corporate information violates the insider trading laws. Given the stakes in a criminal case, and the apparently boundless use being made of the securities laws by prosecutors, this Court in Newman imposed a clear rule: The tip must be shown to have been part of a quid pro quo agreement,” the lawyers wrote in the brief.

“Rajat Gupta was severely prejudiced by the erroneous instruction. The government lacked evidence showing Mr Gupta received even a penny from his alleged wrongdoing. There was no quid pro quo,” they said. Gupta was convicted in 2012 of passing confidential boardroom information to now jailed hedge fund founder Raj Rajaratnam.

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