Gupta's latest bid to reverse insider trading conviction fails

US Second Circuit Court of Appeals yesterday dismissed Gupta's appeal

Less than three months before his two-year prison term ends, India-born former Goldman Sachs director Rajat Gupta has lost another bid to overturn his conviction on insider trading charges, with an appeals court here rejecting his latest legal challenge.

The US Second Circuit Court of Appeals on Tuesday dismissed Gupta’s appeal in which he argued there was insufficient evidence at trial to prove he had received personal benefits from now-jailed hedge fund founder Raj Rajaratnam in exchange for confidential board room information about Goldman Sachs.    

Rajaratnam is serving an 11-year term in the same prison as Gupta.

Gupta, 67, had moved the court seeking a “certificate of appealability” but in the ruling the court “denied” the motion and “dismissed” his appeal.

“Appellant has not shown that 'jurists of reason would find it debatable whether the district court was correct in its procedural ruling' ...as to whether Appellant's claim was procedurally defaulted,” Circuit Judges Susan Carney and Christopher Droney said in their ruling.

Gupta's two-year prison term ends in March next year and ever since his conviction in June 2012, he has filed several appeals, including to the US Supreme Court, to overturn his conviction and prison term but the courts have rejected his arguments and affirmed his sentence.

The former McKinsey chief is currently serving his prison term in a federal prison in Ayer, Massachusetts.

Gupta had last filed an appeal in August in the US Court of Appeals against the July ruling by District Judge Jed Rakoff who had rejected Gupta's appeal saying his argument that the evidence of personal benefit presented at trial was insufficient to sustain his conviction is “both too late and too little”.

In his appeals, Gupta cited a recent landmark decision by the appeals court that had said that for an insider-trading conviction prosecutors must show that a defendant received a personal benefit for passing illegal tips.

Gupta sought to vacate his sentence and the judgment against him on the basis of an argument that the trial court's instruction to the jury concerning the “personal benefit” element of an insider trading violation was "erroneous" and there was insufficient evidence of such benefit.

Rakoff had also denied Gupta's bid to seek a “certificate of appealability” that would have given the IIT and Harvard alumnus another legal recourse to challenge his conviction.

Rakoff, who had presided over Gupta's trial and sentenced him to the two years' imprisonment, had said that even though Gupta is a “man of many laudable qualities,” the “hard fact remains” that he committed a serious crime.