New York: A New York court has set April 9 as the tentative date for the trial of Rajat Gupta, former Indian American director of Goldman Sachs after he pleaded not guilty to insider-trading charges. India-born Gupta, 62, who had surrendered to the FBI on Wednesday morning, was freed after posting $ 10 million bond, secured by his home in Westport, Connecticut. But he was ordered to surrender his passport and not to travel outside the United States.
As Gupta appeared before Magistrate Kevin Fox wearing a navy blue suit and red tie, he remained silent except when asked if he understood his rights. "Yes I do, your honour," he replied.
Gupta, who also served as a board member at Proctor & Gamble, faces one count of conspiracy to commit securities fraud and five counts of securities fraud, according to the indictment filed in the court. The criminal charges could land him in prison for 105 years.
Gupta, has previously been accused of tipping convicted hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings of both Goldman Sachs and Proctor & Gamble. Additionally, when Warren Buffett readied his $ 5 billion investment in Goldman Sachs in 2008, the SEC said Gupta called Rajaratnam before it was publicly announced.
Gupta's lawyer Gary Naftalis, of the firm Kramer Levin, called the government's criminal case 'flawed' and based on 'unreliable evidence being used in an attempt to bring down a man of sterling reputation'.
"The facts demonstrate that Gupta is an innocent man and that he has always acted with honesty and integrity," Naftalis said in a statement on Wednesday.
Laying out the accusations against Gupta, Manhattan US Attorney Preet Bharara said, "Rajat Gupta was entrusted by some of the premier institutions of American business to sit inside their boardrooms, among their executives and directors, and receive their confidential information so that he could give advice and counsel for the benefit of their shareholders,"
"As alleged, he broke that trust and instead became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Gupta's breach of duty."
"The conduct alleged is not an inadvertent slip of the tongue by Gupta," FBI Assistant Director-in-Charge Janice Fedarcyk said in a statement.
"His eagerness to pass along inside information to Rajaratnam is nowhere more starkly evident than in the two instances where a total of 39 seconds elapsed between his learning of crucial Goldman Sachs information and lavishing it on his good friend. That information (captured by the FBI) was conveyed by phone so quickly it could be termed instant messaging."
The Securities and Exchange Commission on Wednesday also filed a civil complaint against Gupta and Rajaratnam, alleging an "extensive insider trading scheme."