In yet another setback for India-born former Goldman Sachs director Rajat Gupta, a federal US judge has rejected his appeal to overturn his two-year sentence and conviction on insider trading.
The judge rejected his plea that there was 'insufficient' evidence of him receiving 'personal benefit' in exchange for providing tips.
District Judge Jed Rakoff said in a 9-page ruling issued on Thursday in the Southern District Court that Gupta's argument that the evidence of personal benefits presented at the trial was insufficient to sustain his conviction calling it 'both too late and too little'.
Gupta, 66, was convicted in 2012 of passing confidential boardroom information to now jailed hedge fund founder Raj Rajaratnam.
He appealed his conviction on various grounds, but the US Federal Court of Appeals and even the Supreme Court rejected his arguments and affirmed the conviction.
Gupta is currently serving a two-year prison term in a federal prison in Massachusetts state and is scheduled to be released in March next year.
In his new appeal, Gupta cited the Appeals Court's recent decision in which it reversed the insider convictions of hedge-fund managers Todd Newman and Anthony Chiasson.
In the landmark ruling, the appeals court had ruled that for an insider trading conviction prosecutors must show that a defendant received a personal benefit for passing illegal tips.
Gupta sought to vacate his sentence and the judgement against him on the basis of an argument that the trial court's instruction to the jury concerning the 'personal benefit' element of an insider trading violation was 'erroneous' and there was insufficient evidence of such benefit.
Rakoff said Gupta had raised the argument at trial but abandoned on appeal and he now 'misreads' the Newman ruling.
He said Gupta and Rajaratnam were 'very close friends,' and Gupta was on a shortlist of five to 10 people allowed to speak with Rajaratnam at the end of the trading day.
"Furthermore, they were close business associates with a considerable history of exchanging financial favours".
Rakoff said the tips for which Gupta was convicted 'yielded the possibility of a more immediate benefit' to him.
He cited the Voyager fund with Rajaratnam in which Gupta had a $10 million stake.
Image: Raj Rajaratnam; Photograph: Lucas Jackson/Reuters