* Gupta must repay most legal fees Goldman sought
* Gupta's lawyer says plans to appeal repayment order
* Also to appeal insider trading conviction, prison term
By Jonathan Stempel
Feb 25 A federal judge on Monday ordered former
Goldman Sachs Group Inc director Rajat Gupta to reimburse
$6.22 million to help the Wall Street bank cover its legal
expenses related to his criminal insider trading case.
Goldman had sought to recover $6.91 million, and U.S.
District Judge Jed Rakoff in Manhattan said the bank had proved
it was entitled to 90 percent of what it requested.
Gupta, 64, is appealing his June 15, 2012 conviction and
two-year prison term for feeding confidential information he had
learned at Goldman board meetings to Raj Rajaratnam, the Galleon
Group hedge fund manager and former billionaire.
Rajaratnam has been a central figure in a multi-year U.S.
government crackdown on insider trading. Gupta is a former
global managing director of the consulting firm McKinsey & Co,
and is the highest corporate executive convicted in the probe.
Jurors found Gupta guilty of leaks during the second half of
2008, including news related to a crucial $5 billion investment
in Goldman by Warren Buffett's Berkshire Hathaway Inc
at the height of the global financial crisis.
Goldman had sought to recover fees it had paid its law firm
Sullivan & Cromwell in connection with Gupta's criminal case and
related matters. It cited the federal Mandatory Victims
Restitution Act, which requires restitution in some fraud cases.
Gupta opposed restitution but Rakoff, who presided over the
criminal trial, said nearly all of what Goldman sought was a
"necessary, direct, and foreseeable result of the investigation
and prosecution of Gupta's offense of conviction."
Rakoff said Goldman could also recover legal costs linked to
a related U.S. Securities and Exchange Commission civil case
against Gupta, and to the criminal case against Rajaratnam.
He said Gupta's opposition to the latter "ignores the
glaring fact" that he had been convicted of conspiring with
Rajaratnam to commit securities fraud.
But the judge said Goldman did not deserve all it sought.
Rakoff said some entries in the "voluminous" 542 pages of
billing records he reviewed did not qualify because they
involved depositions in civil cases that followed the criminal
And Rakoff said Goldman on "a few occasions" assigned too
many lawyers to the case - "perhaps perfectly appropriate on the
assumption that Goldman Sachs wished to spare no expense on a
matter of great importance to it," but more than reasonably
necessary under the law.
Goldman spokesman Michael DuVally said: "We are pleased that
the court ordered Mr. Gupta to pay restitution."
Richard Davis, a lawyer for Gupta, said his client plans to
Rajaratnam is separately appealing his criminal conviction
and 11-year prison term, saying FBI wiretap evidence should not
have been admitted by U.S. District Judge Richard Holwell at his
2011 trial. Holwell is now in private practice.
The case is U.S. v. Gupta, U.S. District Court, Southern
District of New York, No. 11-cr-00907.