District Judge warns prosecutors & defense lawyers to 'sharpen' their presentations
The judge in the insider-trading trial of former corporate luminary Rajat Gupta is worried the jury is in danger of becoming bored.
As the trial went into its second week on Tuesday, US District Judge Jed Rakoff in Manhattan warned prosecutors and defense lawyers to "sharpen" their presentations.
Gupta, 63, a former Goldman Sachs Group Inc board member and global head of management consulting firm McKinsey & Co, is the most prominent corporate figure indicted in the US government's crackdown on insider trading. He is charged with leaking corporate secrets to now-imprisoned hedge fund manager Raj Rajaratnam, who was convicted last year after a high-profile trial.
But Rakoff suggested the Gupta case may be far from scintillating for the jury, which aside from a handful of wiretap recordings, has been inundated with telephone logs, corporate governance guidelines, boardroom minutes, emails and instant messaging records.
"I am in awe of our jury for being attentive," Rakoff said in court while jurors were on their mid-afternoon break. He said the bulk of evidence was asking witnesses to look at "document X" or "document Y."
"We need to find a way to sharpen the presentation on both sides and get it more focused," said Rakoff.
The trial started on May 21 and so far the judge has excused two of the 12 jurors because of family emergencies. Their places were taken by alternate jurors. The trial could run three weeks.
Gupta, who was arrested last October, has pleaded not guilty and argues that the prosecution's evidence is circumstantial.
GOLDMAN SACHS ROLE
Prosecutors contend that Gupta supplied inside information to Galleon Group founder Rajaratnam between March 2007 and January 2009 while serving on the boards of Goldman and Procter & Gamble Co. Rajaratnam and Gupta were friends. Gupta was nominal head of Galleon International and the pair opened a fund Voyager Capital Partners.
On Tuesday, the jurors heard two starkly different versions of who could have leaked confidential information about P&G's $3 billion sale of its Folgers coffee unit in June 2008.
Gupta's main lawyer, Gary Naftalis, implied that any number among an array of company officials, investment bankers and lawyers who worked on the deal could have divulged it in the months leading up to the June 4, 2008 announcement with the buyer, J.M. Smucker Co.
The suggestion was undercut by the testimony of a stock trader who said the tip came from someone at P&G who knew Rajaratnam.
Former Galleon trader, Michael Cardillo, said on the witness stand that in early June 2008, one of Rajaratnam's brothers, RK Rajaratnam, also a Galleon money manager, told him P&G was going to sell Folgers to Smucker.
"He told me the information was coming from Raj's guy at P&G," said Cardillo, who has pleaded guilty to insider trading charges and has agreed so far to testify as a prosecution witness in two trials. Cardillo gave similar testimony on Friday.
P&G Chief Financial Officer Jon Moeller also testified on Tuesday. In questioning Moeller, defense lawyer Naftalis mentioned press leaks and those who worked on the deal.
"So there were all of these people working on the transaction in addition to the Smucker's people, true?" Naftalis asked Moeller, who responded: "Yes, that's true."
One of the main defense arguments is that Rajaratnam had a network of sources. Rajaratnam, 53, was convicted on evidence largely based on court-approved wiretaps of his phones. He is appealing the use of wiretaps as he serves an 11-year prison term, the longest handed down for insider trading in the United States.
Lawyers defending former corporate director Rajat Gupta on insider-trading charges sought on Wednesday to discredit a former hedge-fund trader who ...