Rajat Gupta lost a bid to get documents concerning settlement negotiations between the U.S. Securities and Exchange Commission and witnesses cooperating with a probe into insider trading at hedge funds.
The SEC is suing Gupta, a former Goldman Sachs Group Inc. (GS:US) director, for allegedly passing inside information to Galleon Group LLC co-founder Raj Rajaratnam. U.S. District Judge Jed Rakoff in Manhattan yesterday said Gupta can’t see the tax filings, financial statements and other records relating to the agency’s discussions to settle claims against government witnesses.
Gupta claimed the material would help him establish any bias the witnesses may have against him or in favor of the government, Rakoff said. The SEC has agreed to produce the settlement agreements themselves.
“The negotiations are not the benefit the cooperator is receiving,” Rakoff said. “The best evidence of bias in a cooperator’s testimony comes from the actual agreement he struck with the SEC, not from his lawyer’s attempt to get him a good deal.”
Gupta’s criminal trial on related insider-trading charges is scheduled for May 21. His lawyer Gary Naftalis didn’t immediately return a phone message and e-mail seeking comment on the ruling.
The case is Securities and Exchange Commission v. Gupta, 11-CV-7566, U.S. District Court, Southern District of New York (Manhattan).
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