It’s a pretty sure bet that Rajat Gupta’s lawyer, Gary Naftalis of Kramer Levin Naftalis & Frankel, wasn’t expecting much to come of his bid to exclude government wiretap evidence from the former Goldman Sachs director’s upcoming criminal insider trading trial. And indeed, Manhattan federal district court judge Jed Rakoff curtly refused to exclude the wiretaps in a seven-page order on Tuesday, reminding Naftalis that another Southern District judge had already ruled on the admissibility of wiretap evidence in the government’s insider trading case against convicted hedge fund manager Raj Rajaratnam.
“Gupta offers no arguments different from the arguments Judge [Richard] Holwell considered in the Rajaratnam case. He argues instead that Judge Holwell’s conclusions are in error,” Judge Rakoff wrote. “The Court disagrees.”
But as Peter Lattman at DealBook points out, Gupta’s lawyers did get some good news from Judge Rakoff on Tuesday. In a separate order, Judge Rakoff ruled that federal prosecutors must review notes from about 44 interviews that the Securities and Exchange Commission conducted in its own Gupta investigation, and then hand over any potentially exculpatory Brady material. “The documents Gupta seeks were created in connection with a joint investigation between the SEC and the [U.S. Attorney's office], and it is for the purpose of preparing for the parallel criminal trial that Gupta has a substantial need for any Brady material,” Judge Rakoff wrote.
Judge Rakoff didn’t buy the prosecutors’ argument that their investigation was “parallel” to the SEC probe rather than conducted jointly with the SEC, and that they therefore didn’t need to review the documents. “That separate government agencies having overlapping jurisdiction will cooperate in the factual investigation of the same alleged misconduct makes perfect sense; but that they can then disclaim such cooperation to avoid their respective discovery obligations makes no sense at all,” the judge wrote.
Naftalis declined to comment on Judge Rakoff’s ruling. No doubt he pressed the judge on the Gupta wiretap evidence largely to preserve the issue for a post-trial appeal; Rajaratnam’s lawyers at Akin Gump Strauss Hauer & Feld argued in their own pending appeal before the U.S. Court of Appeals for the Second Circuit that Judge Holwell shouldn’t have admitted the government’s wiretap evidence in that case. We’ve previously covered the wiretaps issue here, here, here, and here.
Gupta’s trial is scheduled to begin May 21.
This article originally appeared in The AmLaw Litigation Daily.
