At a court hearing in Manhattan Feb. 7, U.S. District Court Judge Jed S. Rakoff delayed until May 21 the trial date of former Goldman Sachs Group Inc. director Rajat Gupta on criminal insider trading charges.
The trial had been set for April, but Ratoff granted a six-week delay after Gupta’s defense team asked for more time to prepare for additional charges levied against Gupta by federal prosecutors in an expanded indictment (I-W, Feb. 3). Defense attorneys had asked for a six-month delay.
Gupta pleaded not guilty Feb. 7 to the two new charges brought in the four-count indictment, which accuses him of providing trading tips to Galleon Group founder Raj Rajaratnam.
The prosecution also announced Feb. 7 that it plans to make public previously undisclosed instances where Gupta, a former board member of Goldman and Proctor & Gamble Co., allegedly shared insider information. Prosecutors said they might also add new charges.
“We’re going to disclose other tips in furtherance of the conspiracy,” Assistant U.S. Attorney Reed Brodsky was quoted as saying in The Wall Street Journal.
Gary Naftalis, a lawyer for Indian American executive Gupta, said it would be unfair if prosecutors continue to add charges at this late date. “It’s time for them to stop and try the case they brought,” he said.
Rakoff responded that prosecutors are not precluded from introducing evidence at trial of additional tips in furtherance of the alleged conspiracy.
Prosecutors allege Gupta provided insider information to Rajaratnam, including a $5 billion investment in Goldman by Warren Buffett’s Berkshire Hathaway Inc., at the peak of the financial crisis in October 2008.
The defense argues that the relationship between Gupta and Rajaratnam soured in 2008 and 2009 due to Gupta losing his entire $10 million investment with Rajaratnam, so Gupta was unlikely to provide any stock tips to the Galleon Group founder.
Rajaratnam is currently serving an 11-year prison term for conspiracy and fraud in the insider trading case.