91insidestory· books
AUGUST 2019that he had acted upon. Under the US
Federal Rules for Evidence, declara-
tions against one’s own pecuniary, pro-
prietary and penal interests—admitting
to having committed a felony falls un-
der the third category—are admissible
in court, even if they count as hearsay.
The exculpatory evidence Gupta
claimed had been erroneously excluded
by the court, in turn, centred on four
points. First, the trial court had not al-
lowed his daughter Geetanjali to testify
about his state of mind regarding Ra-
jaratnam, based on a conversation she
had had with Gupta on 20 September
- The appellate court found that
this decision had not been irrational or
arbitrary—Rajaratnam’s treachery in
the Voyager matter had already been
established through other evidence,
and Geetanjali had no personal knowl-
edge about Voyager, so allowing her to
testify would have only served to preju-
dice the jury in Gupta’s favour. Since
her testimony would not have served
any purpose other than confirming un-
disputed facts, the court held that even
if excluding it was erroneous, it would
have been a harmless error.
Second, Gupta had argued that Ra-
jaratnam had another informant on
the Goldman board: David Loeb, a
vice-president in the company. He had
sought to include taped conversations
and emails that established that Loeb
had passed inside information about
the technology companies Intel and
Apple to Rajaratnam. Like Gupta, Loeb
was on Rajaratnam’s list of ten people
who were always to be put through
to him, no matter what he was doing.
However, the trial court had refused to
include this evidence, on the grounds of
hearsay, relevance, lack of foundation
and the likelihood that the documents
would confuse the jury.
The appellate court respected the
trial court’s discretion in excluding the
evidence. Moreover, it argued, Gupta
had not proffered any evidence to show
that Loeb was privy to the confidential
information that had been passed to
Rajaratnam on 23 September and 23
October. In fact, Loeb was part of the
securities division at Goldman Sachs,
which was kept separate—both physi-
cally and technologically—from the
equity-capital division, which had de-
veloped the Buffett deal. Rajaratnam’s
assistant had also testified that the man
who called asking to speak to him ur-
gently before the markets closed on 23
September was not Loeb. Further, the
only call Rajaratnam received in the
ten minutes before 4 pm that day came
from Gupta’s phone.
The third and fourth points re-
garded, respectively, the exclusion of
parts of the financial advisor’s diary
that established Gupta’s charitable in-
tentions and the trial court’s refusal to
allow him to call character witnessesto testify to his integrity. Again, the
appellate court refused to accept that
the judge had abused his discretion on
these matters.
The next opportunity that Gupta
had to exonerate himself was after his
release from prison. In a recent case,
United States vs Newman, the second-
circuit court had reversed two convic-
tions of insider trading. Gupta’s lawyers
claimed that the reversal was based
on the concept that personal benefit
should be tangible, consequential and
of a pecuniary or valuable nature. They
argued that the judge in Gupta’s case
had biased the jury with his instruc-
tion that it would suffice to establish
a personal benefit if Gupta’s purpose
had been simply “maintaining a good
relationship with a frequent business
partner.” However, as with Gupta’s
appeal, the court upheld the original
verdict, finding that the judge’s instruc-
tions were consistent with the Dirkstest, and noting that the formulation of
what constitutes personal benefit in the
Newman case had been expressly re-
jected by the Supreme Court in a subse-
quent ruling as being inconsistent with
Dirks. The only way that he could now
overturn his conviction was by proving
actual innocence, rather than legal in-
sufficiency. Gupta could not.in mind without fear, Gupta is able to
present his story on his own terms. He
can mention repeatedly that he was giv-
en no opportunity to explain himself,
even though it was ultimately his deci-
sion not to do so. While he has admira-
bly, even presciently, tried to address in
the book any holes that one might poke
in his narrative, there is only so much
that 315 pages can hold, especially
when it also includes his personal and
professional history, and all his philan-
thropic endeavours. For instance, the
mention of another organisation Gupta
co-founded, called Mindspirit, slips
through its pages.
Mindspirit was founded by Gupta
and Kumar, in 2001, when the former
was still the managing director at
McKinsey. It was established in their
wives’ names, purportedly to handle
their families’ investments. However,
in the same year, Mindspirit entered a
consulting agreement with InfoGroup,
“to provide advice and guidance” to its
head Vinod Gupta—no relation—a grad-
uate of IIT Kharagpur and a co-founder
of the American India Foundation.
In 2011, McKinsey’s director of com-
munications told Bloomberg News that
“it had always been a clear violation of
our values and professional standards
for any firm member to provide con-
sulting or advisory services outside of
McKinsey for personal monetary gain.”
However, there was no explicit rule to
this effect in the “Firm Policies” docu-
ment that McKinsey consultants had to
sign, as of 2008.
In complaining about the partnership
values McKinsey corroded in “excom-
municating” him from the firm even
before he was found guilty, Gupta ig-
nores that it was the violation of these
very values, on multiple fronts, that
the 29 July phone call embodied, kill-
ing McKinsey’s appetite to debate the
rights and wrongs of his situation.In complaining about the partnership values
McKinsey corroded in “excommunicating” him even
before he was found guilty, Gupta ignores that it was
his violation of these values, on multiple fronts, that
the 29 July phone call with Rajaratnam embodied.