In United States v. Gupta, No. 11 Cr. 907(JSR), 2012 WL 1066804 (S.D.N.Y. Mar. 27, 2012), the Southern District of New York dismissed four motions filed by defendant Rajat Gupta.
Gupta filed a motion to dismiss Count 2 of his criminal indictment on January 3, 2012. Gupta argued that the language of the indictment, including phrases such as “at least approximately 350,000 shares,” and “certain Galleon Funds,” violated his Fifth Amendment rights by allowing the government to prove charges based on evidence that may not have been presented to the Grand Jury. The court denied this motion for two reasons.
First, the court stated Gupta’s claim that the Grand Jury was not presented with evidence was based on “sheer conjecture.” Grand Jury proceedings are confidential and have been historically protected as such. The court refused to inquire into the Grand Jury proceedings, stating it would require something “far more definite” before it would do so.
Second, the court explained that there is no requirement for specific and exact numbers of shares, or specific entities that traded shares, in Grand Jury proceedings on insider trading. An indictment that describes a crime “with enough detail to provide fair notice and protect against double jeopardy” is constitutional and meets the requirements of Rule 7 of the Federal Rules of Criminal Procedure (“Fed. R. Crim. P.”). The court reasoned that Count 2 of the indictment met this standard because it provided Gupta with specific information he allegedly passed to Rajaratnam, the dates shares were traded, information showing the trades occurred through Galleon, and the minimum number of shares allegedly traded. The court stated this gave Gupta the ability to adequately prepare for his defense and the ability to invoke the double jeopardy clause in any subsequent trial if need be.
Gupta also filed a motion to consolidate several counts of the indictment as multiplicitous on January 3, 2012. The court denied this motion as premature for failing to satisfy the two reasons to consolidate. Multiplicitous counts should be consolidated because “charging multiple counts for the same offense ‘may improperly prejudice a jury by suggesting that a defendant has committed not one but several crimes.’” The court advised Gupta that it never reads or sends the indictment to the jury, and that opening statements do not include a recital of the counts; therefore, there is no potential for prejudice until much later in the trial. At that point the court will be able to evaluate a multiplicity claim.
The second reason for consolidation is to avoid the potential for a defendant to be punished twice for the same crime in violation of the double jeopardy clause of the Constitution. The court reasoned this concern arises at the sentencing stage and should not be addressed during the pre-trial phrase. Accordingly, the court dismissed without prejudice the motion to consolidate the counts as premature, allowing Gupta to raise the claim again if and when it becomes ripe.
Additionally on January 3, 2012, Gupta filed a motion to strike prejudicial surplusage pursuant to Fed. R. Crim. P. 7(d). He sought to remove the phrases “for example” and “among other things” when used in allegations relating to how he profited from the alleged conspiracy from the indictment. The court stated that while this motion was filed to strike prejudicial surplusage, the motion argued that the language impermissibly broadened the indictment, allowing the Government to introduce evidence never presented to the Grand Jury. The court dismissed this argument, as it did in Gupta’s motion to dismiss; it is “unsupported speculation” and the phrases do not alter the allegations, but merely indicate the evidence to be presented will not be limited to items listed in the indictment. For these reasons, the court dismissed the motion to strike.
Gupta also filed a Fed. R. Crim. P. 7(f) motion on January 3, 2012, seeking a court order requiring the Government to supply particulars detailing:
- “Gupta’s alleged management role and economic interest in an entity called ‘Galleon International’”;
- “the ‘ownership stake’ that Rajaratnam ‘awarded’ Gupta in Galleon Special Opportunities”;
- “‘financial benefits’ Gupta ‘received and hoped to receive’ as a result of his ownership interest in the Voyager fund”;
- "the number of specific shares involved in the alleged trades based on insider information, i.e. particularizing what is meant by ‘at least approximately 350,000 shares’ of Goldman Sachs in March 2007 (sic)";
- “the specific Galleon funds involved in each trade”; and
- "the quantity, cost, and strike price of the ‘call option contracts’ described in Count One.”
The court stated Gupta had already received this information through the indictment, the discovery already provided by the Government, discovery available through the SEC civil case, Rajaratnam’s previous criminal proceedings, and a bill of particulars already provided by the Government. Even if the information sought had not been available to Gupta from these other sources, the court stated that the “highly specific evidentiary detail” sought is not appropriate for a bill of particulars. Therefore, the court dismissed the motion.
The primary materials for this case may be found on the DU Corporate Governance website.