- Bloomberg
- Rajat Gupta arrives with his attorney Gary Naftalis, right, at federal court in New York on Wednesday.
By Chad Bray and Reed Albergotti
Former Goldman Sachs Group Inc. director Rajat Gupta is “highly likely” to take the stand next week in his insider-trading trial, his lawyer said Friday.
Mr. Gupta, also a former director of Procter & Gamble Co., is accused of passing corporate secrets about Goldman and P&G to hedge-fund manager, Raj Rajaratnam, who was convicted of insider-trading charges and sentenced to more than 11 years in prison last year.
Gary Naftalis, Mr. Gupta’s lawyer, said the decision to put client on the stand was “a very difficult decison to make,” but represented to the court it was “highly likely” that Gupta would testify when the trial resumes next week.
After 13 days of trial, prosecutors rested their case Friday against Mr. Gupta who has pleaded not guilty to conspiracy and securities-fraud charges.
The WSJ’s Michael Rothfeld, in this May 29 story, wrote about the risks Mr. Gupta would take in testifying in his own defense:
The biggest potential drawback for Mr. Gupta, the 63-year-old former head of consulting firm McKinsey & Co., is that by testifying he could undermine his lawyer’s main strategy: punching enough holes in a circumstantial prosecution based on phone and trading records to win an acquittal.
“The moment someone takes the stand, he’s held to a different burden,” said Susan Brune, a New York defense lawyer who won the acquittal of a Bear Stearns Cos. hedge-fund manager by raising doubt about the charges, without having her client take the stand.
“It becomes very much: ‘Who do you believe and whose account is more plausible?’ as opposed to, ‘Did the government do their job and did they prove it beyond a reasonable doubt?”‘
But there are strategic reasons Mr. Gupta, with his swept-back hair, square jaw and soothing voice of a television anchor, might take the stand, particularly if the case appears to be a toss-up:
Mr. Gupta’s lawyers might want him to testify that he and Mr. Rajaratnam were talking about a failed investment, not illegal stock tips, during the calls in question.
“He is someone who is capable of thinking on his feet, so he could be a formidable witness and he could be his own best advocate,” said Roland Riopelle, a white-collar-crime defense lawyer in Manhattan.
Mr. Gupta also could tell jurors personally about what Mr. Naftalis characterized in his opening statement as an uplifting success story of a man whose father, a journalist and freedom fighter, and mother, a Montessori teacher, died by the time he was in his teens.