Rajat Gupta Seeks Reversal of Insider Trading Conviction

Rajat Gupta, a former Goldman Sachs board member, has asked a federal appeals court to reverse his conviction on insider trading charges, arguing that a judge made a series of incorrect rulings during his trial.

“This court should reverse the convictions in view of the court’s serious evidentiary errors, which decisively tipped the scales in this case,” wrote Mr. Gupta’s lawyers in its brief to the United States Court of Appeals for the Second Circuit in Manhattan, which was filed late Friday.

A jury found Mr. Gupta guilty of leaking Goldman boardroom secrets to his friend, the former hedge fund manager Raj Rajaratnam. Mr. Gupta, 64, of Westport, Connectcut, is free on bail pending the resolution of his appeal.

Lawyers for Mr. Gupta made several arguments on appeal. Among the most significant arguments on appeal is that the government should not have been allowed to use certain wiretap evidence during the trial.

Judge Jed S. Rakoff, the trial court judge, allowed the jury to hear two incriminating taped conversations involving Raj Rajaratnam and his traders suggesting that the Mr. Rajartanam had a source inside Goldman.

On one wiretap - perhaps the most damning piece of evidence presented at trial - Mr. Rajaratnam tells a colleague, “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share.”

Mr. Gupta’s lawyers argued that Mr. Rajaratnam’s statement is the unreliable hearsay testimony “of a kn! own fabulist.”

“Without a proper basis for admission, these untestable, unreliable hearsay statements had no place in a criminal trial, and their admission alone compels reversal,” Mr. Gupta’s lawyers wrote.

Mr. Gupta also argues that Judge Rakoff erred in curtailing the testimony of Mr. Gupta’s daughter, Geetanjali Gupta, who had planned to testify that her father was furious with Mr. Rajaratnam because of a money-losing investment he had made with the hedge fund manager. Her testimony, argued Mr. Gupta’s lawyers, “would have led the jury to question whether Gupta had any motive to tip the man who had stolen millions from him.”

The 72-page brief was signed by Seth P. Waxman, the lawyer spearheading Mr. Gupta’s appeal. Mr. Waxman served during the Clinton administration as a United States solicitor general, the federal government’s top appellate advocate. Now a partner at WilmerHale, he has argued more than 50 cases before the Supreme Court.

Also on the brief wer Mr. Gupta’s trial team at Kramer Levin Naftalis & Frankel, led by Gary P. Naftalis.