Apparently this came as a surprise to Rajat Gupta.
In a unanimous ruling, a federal appeals court rejected Mr. Gupta’s bid for a new trial, upholding a 2012 conviction that was a milestone in the government’s sweeping investigation into insider trading on Wall Street. “We conclude that none of the challenged rulings constituted an abuse of the court’s discretion and that a new trial is unwarranted,” Amalya L. Kearse wrote in a 48-page opinion on behalf of a three-judge panel of the United States Court of Appeals for the Second Circuit. The court found that there was “ample evidence” that Mr. Gupta took part in a wider criminal conspiracy. A jury convicted Mr. Gupta, a former Goldman Sachs director, of leaking the bank’s boardroom secrets to his hedge fund friend, Raj Rajaratnam...The verdict handed the United States attorney’s office in Manhattan a signature victory in a case that hinged on circumstantial evidence. But Mr. Gupta’s lawyers argued that the judge who presided over the case committed a number of costly errors at trial. For one, the lawyers argued, the judge, Jed S. Rakoff of Federal District Court in Manhattan, erroneously admitted conversations that the government secretly recorded. The wiretaps, which consist of Mr. Rajaratnam boasting that he received tips from an unnamed Goldman insider, underpinned the government’s case against Mr. Gupta. In one recording that came just after Mr. Rajaratnam sold a portion of his Goldman shares, he told a colleague, “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share.” Prosecutors introduced phone records showing that Mr. Rajaratnam and Mr. Gupta had spoken the day before...
In court papers and oral arguments last spring, Mr. Gupta’s lawyers complained that Judge Rakoff had undercut their theory that a different Goldman Sachs insider was leaking the bank’s boardroom secrets to Mr. Rajaratnam.
Court Rejects Rajat Gupta’s Appeal [Dealbook]