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Insider trading-hit Rajat Gupta wants new trial, reversal of conviction

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SummaryIndia-born former Goldman Sachs director Rajat Gupta has asked a US court for a new trial to reverse his conviction on insider trading charges, arguing that the district judge had committed "serious evidentiary errors" that tipped the scales decisively in the case.

India-born former Goldman Sachs director Rajat Gupta has asked a US court for a new trial to reverse his conviction on insider trading charges, arguing that the district judge had committed "serious evidentiary errors" that tipped the scales decisively in the case.

In a 72-page brief submitted with the US Court of Appeals for the Second Circuit, Gupta's lawyer Seth Waxman argued that his client is "entitled to a new trial" at which "unreliable hearsay statements are excluded" and the jury "hears the full story of Gupta's defence".

"The Court should reverse the convictions in view of the (district) court's serious evidentiary errors, which decisively tipped the scales in this case," Waxman said.

Gupta, 64, was convicted of passing confidential boardroom information about Goldman Sachs to his friend and business associate Galleon founder Raj Rajaratnam, who is currently serving an 11-year prison term for running one of the biggest insider trading schemes in US history.

The former McKinsey head was sentenced to two years' imprisonment by US District Judge Jed Rakoff in October last year but was last month granted his request to remain free on bail while he fights his conviction.

Waxman said the prosecution's case rested exclusively on circumstantial evidence and predominantly on wiretap statements, which were not made by Gupta but by Rajaratnam, who is a "highly unreliable declarant, speaking with other people with no connection to Gupta".

He said the district court was wrong in admitting the hearsay wiretap statements, which Gupta could not cross-examine given Rajaratnam's unavailability.

"Without a proper basis for admission, these untestable, unreliable hearsay statements had no place in a criminal trial, and their admission alone compels reversal," Waxman said.

"The court's decidedly asymmetrical interpretation of the rules of evidence left the jury with a distorted picture, in which Gupta was accused by the self-serving hearsay of a known fabulist beyond Gupta's power to cross-examine, but was unable to explain to the jury that he had neither the motive nor the inclination to benefit that person, and that there was a plausible alternative perpetrator," Waxman said.

In one of the wiretaps presented at Gupta's trial, Rajaratnam says, "I heard yesterday from somebody who's on the board of Goldman Sachs that they are going to lose USD 2 per share".

Waxman said while the court allowed the use of wiretaps as evidence during the trial, it "significantly curtailed" Gupta's principal defences by barring him from presenting "admissible evidence," which would have shown to

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