Ex-Goldman director to stay free on bail: court

Tue Dec 4, 2012 9:57pm EST
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By Nate Raymond

NEW YORK (Reuters) - Former Goldman Sachs Group Inc board member Rajat Gupta can remain free on bail while he appeals his insider-trading conviction, an appeals court ruled on Tuesday.

Gupta had been scheduled to surrender January 8 to start a two-year prison sentence. But after hearing arguments from Gupta's lawyer and prosecutors, a two-judge panel of the 2nd U.S. Circuit Court of Appeals in New York granted Gupta's request to stay out of prison.

Gupta, 64, was convicted in June of leaking Goldman boardroom secrets to Raj Rajaratnam, the Galleon Group hedge-fund manager at the center of a U.S. government crackdown on insider trading over the past four years. Gupta, also a former head of management consultancy McKinsey & Co, has been free on $10 million bail.

The former Goldman director attended the hearing with his family. After the hearing, he hugged his lawyer, Seth Waxman, and patted him on the back.

Waxman declined to comment on the appeals court's ruling. A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment.

The U.S. Justice Department had argued that Gupta should not be able to delay going to prison while he awaits the outcome of his appeal, which is expected to be heard by the 2nd Circuit as early as April.

At Tuesday's hearing, Waxman argued that Gupta's appeal would raise substantial questions that likely would result in his conviction being reversed.

The government hadn't proved its case, which relied on "classically inadmissible" or "entirely circumstantial" evidence, Waxman said. "It totally failed in that regard."   Continued...

Former Goldman Sachs Group Inc board member Rajat Gupta leaves the U.S. District Court with his lawyer Gary Naftalis after he was sentenced in Manhattan, New York October 24, 2012. REUTERS/Adrees Latif