Ex-Goldman Sachs director Rajat Gupta lost his bid to get three key wiretaps tossed as evidence in his upcoming insider-trading trial.
Manhattan federal judge Jed Rakoff gave tentative approval yesterday for the jury to hear the wiretaps, which are crucial to the government’s case against Gupta.
A former head of McKinsey & Co., who also sat on Procter & Gamble’s board, Gupta is accused of feeding tips to ex-hedge funder Raj Rajaratnam, who began an 11-year prison term last October for insider trading.
Gupta, who wasn’t at the hearing, is the most high-profile name to get caught up in the government’s huge crackdown on insider trading on Wall Street.
AP
Ex-Goldman Sachs director Rajat Gupta was denied by Judge Jed Rakoff in his effort have three key wiretaps dismissed as evidence.
Rakoff said he will allow the government to play the wiretaps if, during the trial, prosecutors first prove the alleged conspiracy between Gupta and Galleon Group founder Rajaratnam.
The taped conversations between Rajaratnam and his traders have him talking about tips from a unnamed leaker on Goldman’s board.
“This conversation reeks of knowledge and intent,” Rakoff said, referring to a wiretap call between Rajaratnam and trader Ian Horowitz.
On the call, Rajaratnam is heard telling Horowitz he got a call that “something good might happen” to Goldman, referring to Warren Buffett’s plan to invest $5 billion to prop up the bank during the financial crisis.
Gupta’s top lawyer, Gary Naftalis, said the government will show only that his client called Rajaratnam after the board meeting to approve the Buffett deal, but that there’s “no direct evidence that they ever had a conversation.”
The judge also inferred, based on the defense’s requests, that Gupta may take the stand. “I take it you are hereby admitting [Gupta] will take the stand,” Rakoff asked Naftalis.
Naftalis declined to show his hand, but Rakoff promised that if his client were to take the stand he would leave the door open to further discussions surrounding the admissability of statements about Gupta’s charitable work.
kwhitehouse@nypost.com
Rajat Gupta, Raj Rajaratnam, Jed Rakoff, McKinsey & Co., insider trading, Wall Street.APEx-Goldman Sachs, direct evidence, Ex-Goldman Sachs, Gary Naftalis, Galleon Group, wiretaps
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