New York - Former Goldman Sachs director Rajat Gupta never profited from insider trading allegedly conducted with his friend, hedge fund magnate Raj Rajaratnam, his lawyer said in court on Thursday, calling the government case "mumbo jumbo".
Attorney Gary Naftalis pleaded before Judge Jed Rakoff in Manhattan Federal Court for prosecutors to be forced to specify what gain Gupta could have got from his alleged crimes.
"We'd like to know: what's their theory?" Naftalis said. "What were the financial benefits?... It's a simple question."
Prosecutors said that Gupta, who also sat on the board of Procter & Gamble and headed the management consultancy giant McKinsey & Co, passed non-public tips to Rajaratnam that the founder of the Galleon hedge fund then traded on.
The law does not require Gupta to have benefited financially to be considered guilty of insider trading. The government alleges he was cultivating personal and business relations, as well as seeking unspecified financial gain.
However, Naftalis said Gupta, who denies all charges, should be presented with detailed accusations, not "vague mumbo jumbo."
"Our client didn't trade, there was no profit-sharing agreement, there was no kickback," he said. According to Naftalis, the issue casts "real doubt on the credibility of their case".
The government said in court it is likely to bring slightly revised charges in a superseding indictment by the end of January.
The trial start is scheduled for April 9.
Gupta is charged with securities fraud and conspiracy to commit securities fraud. On paper, he faces a maximum prison sentence of up to 105 years if convicted on all charges.
Rajaratnam was convicted in 2011 and is serving an 11-year sentence, the longest handed down in the United States for insider trading.
The government says Gupta was a crucial part of a wide web of insiders illegally passing information to each other, including telling Rajaratnam major market-moving news about Goldman Sachs that was not yet public.
Indian-born Gupta, who comes from humble roots in Kolkata and worked his way up to the very top of McKinsey, joined the Goldman board in November 2006.