New York: Evidence of insider trading against businessman Rajat Gupta is "overwhelming," a prosecutor told jurors at the trial's close on Wednesday, while a defence lawyer countered that the government had a weak, circumstantial case without direct proof.
In one of the US government's biggest insider trading prosecutions in recent years, jurors were expected to begin deliberating the charges against Gupta, a former Goldman Sachs Group Inc board member, on Thursday.
Prosecutors said in closing arguments that phone records and trading records and also recorded phone calls between now-imprisoned hedge fund manager Raj Rajaratnam and his senior trader proved Gupta had brazenly and illegally passed stock tips to the money manager.
The defence argued that the government "had no real, hard, direct evidence" to convict Gupta.
"Where is the beef in this case?" defence lawyer Gary Naftalis asked the Manhattan federal court jury. "We have had no real first-hand knowledge of the crimes alleged to have been committed here."
Prosecutors have accused Gupta, 63, of passing tips to Rajaratnam including the $5 billion investment boost for Goldman by Warren Buffett's Berkshire Hathaway in 2008, at the height of the financial crisis. They said Gupta, who also served on the board of Procter & Gamble, told Rajaratnam about financial results of both companies between March 2007 and January 2009 before they were announced to the public.
To win a conviction, prosecutors must prove beyond a reasonable doubt that Gupta betrayed his duties to the companies and that he had something to gain from tipping Rajaratnam. The former board member was not accused of trading in stocks of the companies, but he and Rajaratnam were associates who had several investments together.
"Rajat Gupta abused his position as a corporate insider by providing secret company information to his longtime business partner and friend Raj Rajaratnam, so Rajaratnam could use that information to buy and sell stocks before the investing public," federal prosecutor Richard Tarlowe told the jury.
"By doing so, Gupta enabled Rajaratnam to make millions of dollars," he said.
"Time and time again Gupta betrayed that trust and violated that duty by using the secret information to help Rajaratnam cash in on it," Tarlowe told the jurors. "The evidence against Gupta is overwhelming."
Rajaratnam, founder of the Galleon Group hedge fund and a one-time billionaire, was convicted in the same courthouse last year and is serving an 11-year prison term.
Gupta is a retired head of the McKinsey & Co business management consultancy. He joined Goldman's board in 2006 and left in May 2010, seven months after Rajaratnam's arrest. He also is a former director at American Airlines Corp.
He faces a maximum prison sentence of 25 years if convicted on the charges of securities fraud and conspiracy.
Before trial summations started on Wednesday morning, Gupta kissed and embraced his eldest daughter, Geetanjali Gupta, who testified on his behalf on Monday and Tuesday. Gupta's wife, Anita, and his four daughters have been a regular presence in the courtroom throughout the trial, now in its fourth week.
At the trial, the jury heard about Gupta's humble beginnings in India and his rise to the ranks of the global corporate elite.
They also heard from prosecution star witness Lloyd Blankfein, the Goldman Sachs chief executive, who said all discussions at board meetings were confidential. Blankfein also testified for the prosecution at Rajaratnam's trial last year.
The case is USA v Gupta, US District Court for the Southern District of New York, No. 11-907.