Gupta fate hinges on witnesses

Through phone logs, trading records and a parade of witnesses, US prosecutors repeatedly worked to connect the dots between Rajat Gupta, the former head of top consulting firm McKinsey & Co, and his hedge fund manager friend Raj Rajaratnam.

Through phone logs, trading records and a parade of witnesses, US prosecutors repeatedly worked to connect the dots between Rajat Gupta, the former head of top consulting firm McKinsey & Co, and his hedge fund manager friend Raj Rajaratnam.

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It is now up to a Manhattan federal jury to decide if this evidence against Gupta, a former board member at Goldman Sachs Group and Procter & Gamble, is persuasive enough to convict him.

Historically, insider trading cases have been difficult for prosecutors to win because of their circumstantial nature. The Rajaratnam case was a major exception because the government had dozens of secretly recorded telephone calls of him discussing stock tips with friends.

In the Gupta case, prosecutors only had a few wiretaps they could use to bolster their charges that Gupta supplied Rajaratnam with some of his juiciest tips. They had no telephone recording to back one of their most dramatic contentions: that Gupta, a minute after disconnecting from a Goldman board conference call on Sept 23, 2008, told Rajaratnam about plans by Warren Buffett's Berkshire Hathaway to inject $5 billion in the investment bank.

The jury heard evidence that Rajaratnam hurriedly ordered his traders at hedge fund Galleon Group to try to buy $40 million worth of Goldman stock in the few minutes that remained in the trading day after he received that call from Gupta.

"There was only one call to Rajaratnam's direct line in the last 10 minutes of the trading day," Assistant US Attorney Richard Tarlowe said in his closing argument on Wednesday. "And it was from Rajat Gupta."

Gupta's defense lawyer, Gary Naftalis, responded: "If he was truly rushing, he wouldn't have waited a minute, he would have called in two or three seconds."