“Raj’s brother, Rengan Rajaratnam, in a taped conversation with Raj about another McKinsey consultant they were working to turn, made what we think was the comment that best summarizes the entire affair: “Scumbag. Everybody is a scumbag.”
The SEC’s original charges were brought in an administrative action, the sanctions of which don’t include a criminal conviction or jail time. Gupta sued to move the case to federal court, claiming that the SEC’s action denied him his right to a jury trial. Fair enough, but you’d think that someone who spent years selling strategy would be a smarter buyer when his lawyers were selling it to him.
Gupta’s trial is scheduled to begin in April and he’s no doubt spending millions on defense. Even if he wins, those millions and an acquittal won’t help him get his reputation back or be welcomed back into his old circles. That’s how Greenspan said it would work. His peers have already convicted him, including his former partners at McKinsey, whose thousands of employees no more deserve to be tainted by a few bad apples than those of Arthur Andersen did back in 2002.
A better road out of the mess he got himself in would have been to apologize, admit to the SEC charges, and use the millions he’s spending on lawyers to buy mosquito nets in Africa or make non-profit micro loans in Indian villages. Both of those places need the money a lot more than high powered defense attorneys whose best outcome still won’t solve Gupta’s main problem. Everybody sins. How you handle being caught defines the line between redemption and recalcitrance.”
(Lila: How can you be sure he sinned?)
Comment
This piece sums up my feelings well. Gupta was sold a bad strategy by his lawyers. Naftalis might be a brilliant guy. But here are some things that make uneasy:
1. He’s old friends with Judge Rakoff and he couldn’t work out a way to get the hearsay excluded and the tapes of the leakers included?
2. He announces his defendant is going to take the stand, which is rarely done and which always leads to a conviction in insider cases, anyway. Then he turns around on Monday and says no. So as the prosecution and defense are winding up, the only thing playing in the media and in the jury’s mind is – this guy can’t face us on the stand.
How bad did that look? And why did Naftalis do that to him?
3. Instead of just accepting the SEC’s administrative hearing and taking whatever the deal the government had for him, which would have involved no jail time or criminal conviction, he is facing major jail time.
Maybe he was so convinced he was being unfairly singled out. Maybe he knows he’s innocent, how can we be sure?
4. Now he also has a criminal conviction, after a brilliant and honorable career. He is a pariah.
5. According to some, the appeal is going to be very difficult. If Naftalis blew the defense, how is he going to succeed on the appeal?
6. There are so many odd things, including Rakoff’s decision on keeping the defense’s evidence from the jury; his instruction to them on conspiracy; the speed of the decision; the media framing etc.
I have to ask the question. Is there something more going on….a bigger set up?
TWO QUESTIONS: When Lloyd Blankfein asked him to stay on in September 2008, was there something else going on?
Why did Blankfein go over and shake Raj Rajaratnam’s hand at his trial? It was unusual, and some said it showed how gracious he was. Why did he do it? Was there something else? Did he and Big Raj cut some kind of deal and throw Gupta to the wolves? What is Mark Schwartz’s relationship to Gupta? Why was Henry King to be protected? How do we know there wasn’t another call that day, on Sept 23?
Rakoff, Naftalis, Blankfein, Loeb, Bharara.
All from New York, a city dominated by one industry.
If Government Sachs and the Government decided to get together to stick the knife in this guy, do you think they’d get to influence the judge and…would a clever and unscrupulous defense lawyer also play his cards in the manner best suited to himself, rather than to his client?
Just puzzled and very saddened by this ominous case. Something doesn’t feel right. It feels like a puppet show, whose outcome was already known before hand.