By Nate Raymond
NEW YORK Jan 22 Lawyers for former Goldman
Sachs Group Inc board member Rajat Gupta are urging a
federal appeals court to reverse his insider trading conviction,
arguing that a judge shouldn't have allowed wiretaps to be heard
In a brief filed Friday at the 2nd U.S. Circuit Court of
Appeals in New York, Gupta's lawyers argued wiretaps of
now-imprisoned hedge fund manager Raj Rajaratnam amounted to
"hearsay statements" and should not have been presented to the
"Without a proper basis for admission, these untestable,
unreliable hearsay statements had no place in a criminal trial,
and their admission alone compels reversal," Gupta's lawyers
A federal jury convicted Gupta, 64, in June of leaking
Goldman boardroom secrets to Rajaratnam, the Galleon Group hedge
fund manager at the center of a wide-ranging U.S. probe into
Gupta, who was at one time head of management consultancy
McKinsey & Co, was sentenced by U.S. District Judge Jed Rakoff
to two years in prison. The 2nd Circuit in December said Gupta
could remain free on bail while he appeals his
A trial is scheduled to begin Feb. 11 in a separate civil
lawsuit by the U.S. Securities and Exchange Commission.
Of the four counts Gupta was charged with in the criminal
case, his lawyers said Friday that the jury only convicted him
on the two backed by wiretaps of Rajaratnam, who is serving an
11-year sentence following his own conviction in May 2011.
Gupta's lawyers say the wiretaps amounted to hearsay
evidence, since they were of conversations between Rajaratnam
and other Galleon Group employees, rather than with Gupta.
Gupta's lawyers said he was also prevented from presenting
evidence of an alternative perpetrator and of Gupta's integrity.
The defense lawyers say they weren't allowed to present
testimony by Gupta's daughter about a conversation where her
father said he was angry at Rajaratnam for allegedly cheating
him out of millions of dollars through a joint investment fund
known as Voyager Capital Partners.
The conversation took place three days before one of the
alleged tips Gupta was convicted on and a month before a second,
the brief said. Gupta contends that if the testimony had been
presented, the jury would have been led to question Gupta's
motives to tip Rajaratnam.
Terence Lynam, a lawyer for Raj Rajaratnam, in a statement
denied that his client "swindled" Gupta, as the appellate brief
"No funds of Mr. Gupta were ever misappropriated and Mr.
Gupta was not 'swindled' in any way," Lynam said.
A spokeswoman for Manhattan U.S. Attorney Preet Bharara
declined comment. The government is scheduled to respond with
its own appellate brief March 15.
The case is USA v. Rajat Gupta, 2nd U.S. Circuit Court of
Appeals, No 12-4448.