Haynes and Boone's Newsroom

David Siegal in Bloomberg: Gupta Insider Case Built on Circumstantial Proof Poses Challenge to U.S.
10/27/2011

The insider-trading prosecution of former Goldman Sachs Group Inc. director Rajat Gupta is built on circumstantial evidence that may be less persuasive than the wiretaps that sealed the fate of his friend Raj Rajaratnam ...

And to prove that Gupta disclosed secrets about P&G's earnings, the indictment cites an eight-minute telephone call that Gupta made to Rajaratnam from Switzerland on Jan. 29, 2009, hours after he learned about the Cincinnati-based company's results. Rajaratnam also claimed to have gotten information from "someone" on the P&G board, prosecutors said.

"The government has a long history of prosecuting insider trading cases based on circumstantial evidence of well-timed phone calls and trading based on material events," said David Siegal, a former federal prosecutor now at Haynes and Boone, LLP in New York. "People have been prosecuted and convicted without tape recordings for 200 years."

Excerpt from Bloomberg, Oct. 27, 2011. To view the full article, click here.