A lawyer for former Goldman Sachs Group Inc. (GS) Director Rajat Gupta, accused of non-public information to propagate to Galleon Group LLC Fund Manager Raj Rajaratnam, said today that the US had the "wrong man" on trial.
Gupta of lawyer, Gary Naftalis, said that Rajaratnam had a different dump truck Goldman Sachs, who gave him confidential information about Intel Corp. (INTC) and Apple Inc. (AAPL), the lawyer said. That Goldman was also caught on wiretaps Government pass the source inside information, Naftalis said.
Gupta, 63, who denies wrongdoing, is scheduled to go on trial may 21 for leaking tips to Rajaratnam about Goldman Sachs and Procter Gamble Co. (PG), where & Gupta was also a Director.
"There are wiretaps, wiretaps that they've had for years, that these confidential information," argued today Naftalis.
"The fact that the issue is important because we have the wrong man on trial here," said Naftalis. "They know that there is a person at Goldman Sachs that inside information on at least two effects, on Apple and Intel, Mr. Rajaratnam is leaked. It's definitely clear this is our hot information. We want to press on this issue. We think there is a lot more indirect case that that person should sit in the box than us. "
Prosecutors in a 3 February letter to U.s. District Judge Jed Rakoff, who is presiding over the case, mentioned that Rajaratnam had a second "insider at Goldman Sachs ' tips to Rajaratnam leaked. Rakoff referred to this person as "Mr. X."
Prosecutors also said that the tips did not relate to Goldman Sachs or & Procter Gamble.
Lawyers do not identify the Goldman Sachs insider in Court today. Michael DuVally, a spokesman for Goldman Sachs, refused to comment on the allegations Naftalis.
The allegations came today after Assistant U.s. Attorney Reed Brodsky said that lawyers Government memos on witnesses who Rajaratnam against the fund manager testified during his trial last year had his share.
Brodsky said that while the Gupta defense team has claimed they haven't gotten proof of public prosecutors and the identity of "Mr. X" wanted, defense lawyers already have evidence by Rajaratnam, including a copy of a memorandum from an 11 January 2011, interview by agents of the Federal Bureau of Investigation with former Galleon portfolio manager Adam Smith. Brodsky said the lawyers claimed in a January today Gupta told that they do not know who the insider Goldman was.
"They started making accusations that Mr Gupta has no idea who the insider Goldman was who was providing non-public information," Brodsky said. "A memo 11 January 2011, Adam Smith's interview contains all the information," he said.
Rakoff later reviewed the letter from the Government to identify that individual and agreed with prosecutors to keep it under seal because the alleged tips were not related to any of the accusations against Gupta.
"They have nothing to do with a problem in this case, directly or indirectly, and therefore do not need to be mentioned," Rakoff said in February. He did not rule over the issue today say, "I don't think that any lawsuit is required, one way or another."
Rakoff is still not ruled on whether he Gupta of lawyers to present evidence of another source of Goldman to the jury will allow.
Naftalis refused to comment after Court, as well as public prosecutors.
Gupta, the one-time leader and former Director at McKinsey & co-& Procter Gamble, was accused by US Attorney Preet Bharara in October of passing inside information of Manhattan to Rajaratnam, co-founder Galleon Group LLC. The US says that tipped Rajaratnam about Goldman Sachs and P Gupta & G profit.
A revised indictment filed in January prosecutors expanded description of the insider-trading in emission rights, saying that it began in March 2007, not 2008, as the USA claimed when Gupta was first charged in October.
RAJARATNAM, who was convicted by a jury of all 14 points against him last year, is an 11-year prison sentence service.
The case is U.S. v. Gupta, 11-cr-00907, u.s. District Court, Southern District of New York (Manhattan).
To Contact the reporter on this story: Patricia Hurtado in New York on pathurtado@bloomberg.net
To Contact the editor responsible for this story: Michael Hytha on mhytha@bloomberg.net
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