On March 25, the Second Circuit Court of Appeals affirmed the insider trading conviction of former Goldman Sachs Group Inc. (“Goldman”) director Rajat Gupta.  In October 2012, Judge Jed Rakoff sentenced Gupta to two years in prison and a $5 million fine for passing tips from Goldman board meetings to hedge fund manager Raj Rajaratnam.  The Court of Appeals rejected Gupta’s argument that his conviction should be overturned because it was improperly based on hearsay evidence obtained by wiretapping Rajaratnam’s cell phone calls with other colleagues.  In a separate but related appeal, Gupta is challenging a $13.9 million civil penalty stemming from an SEC action against him, arguing that the civil penalty is excessive in light of the $5 million criminal fine.  The Second Circuit has yet to issue a decision in that case.  United States v. Gupta, 12-4448 (2d Cir.)

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