The insider trading case against former Goldman Sachs director Rajat Gupta is built largely on circumstantial evidence, making it difficult – but not impossible – to convince a jury of his involvement.
“The prosecutors need to prove Gupta’s guilty beyond a reasonable doubt, which is the most difficult standard to meet in our court system,” explained Buchanan Ingersoll & Rooney White-Collar Defense Shareholder Barry I. Slotnick in a Forbes India article published June 14, 2012.
“Because the government does not have a single wiretap of Gupta providing insider information, but has hundreds of hours of wiretaps, the defense had much to work with in suggesting to the jury that Gupta was wrongly accused,” he said.
As detailed in the Forbes article, Gupta’s defense is rooted in the premise that other Goldman executives provided insider information, not Gupta. According to Slotnick, the tactic may have been somewhat successful.
“The defense has raised a series of doubts by demonstrating that there were others [Loeb], that provided information about stocks in the same time period and that Gupta had a falling out with [ex-Galleon Group manager Raj Rajaratnam] prior to the time he is alleged to have provided him with insider information,” explained Slotnick.