We all know how things turned out for former Galleon head, Raj Rajaratnam.
Now Raj’s friend, Rajat Gupta, a former Goldman Sachs director, is getting ready for his turn in the hot seat (with Judge Rakoff, no less).
Gupta, though, wasn’t nearly the insider trader that Rajaratnam was. In fact, he never profited from inside information at all, he just handed information off to Raj.
So his lawyers are taking advantage of that fact to make three arguments for why Gupta shouldn’t be treated the same way Raj was. We picked up copies of their memorandums from Dealbook.
First, thing’s first, they’re asking that wiretaps not be used in the case. It’s going to be a hard sell, given the fact that Raj got the full wire-tap treatment, and that most of the case against Gupta is built around tips he gave Raj over the phone. For example, he told Raj that Warren Buffett was going to buy Goldman stock — and then Raj turned right around and bought some himself.
But Gupta’s lawyers are arguing that Raj’s wiretaps shouldn’t have been used in the first place (so wiretaps shouldn’t be used against Gupta) for three reasons.
- Because “Title III does not permit prosecutors and investigators to use wiretaps in investigations of suspected insider trading…”
- Gupta’s lawyers allege that the government did not prove that all other methods for gathering evidence had been exhausted before they used wiretapping in Raj’s case.
- If the government had actually tried to argue that all methods of evidence collection had been exhausted and moved to use wiretaps, a judge would have rejected that motion.
The next argument Gupta’s lawyers have pulled out is that there are too many counts against their client. The prosecution is using two incidents where Gupta passed information along to Raj to make their case against him, but there are 5 securities charges against him. Gupta’s lawyers want some of those removed or consolidated.
Plus, Gupta’s lawyers found some of the language in the charge against their client misleading. The charges state that Gupta passed along information about Goldman Sachs, Proctor and Gamble and “other companies”… but none of the evidence mentions what those “other companies” could be.
Lastly, Gupta’s lawyers are asking for a “bill of particulars” — a detailed former statement outlining the charges against the defendant — to help them clarify all the charges in documents the government provided as evidence in the case. There are about 2.2 million of those documents.