The federal judge overseeing the civil and criminal insider trading cases against former Goldman Sachs board member Rajat Gupta has put much of the civil case on hold, in a victory for prosecutors.
But U.S. District Judge Jed Rakoff said Gupta’s attorney can go ahead with questioning of Goldman Sachs Chairman Lloyd Blankfein and a handful of other prospective witnesses in the civil case.
Gupta, who is also the former head of consulting giant McKinsey, is accused of illegally sharing inside information with Galleon Group hedge fund founder Raj Rajaratnam, convicted in May on 14 insider trading counts. Gupta faces both criminal charges and a civil suit by the Securities and Exchange Commission. Criminal prosecutors were concerned that if his attorneys were allowed to question witnesses in the civil case, it would give Gupta an early look at the evidence against him in the criminal case, since many of the witnesses are the same.
Rakoff agreed to adjourn most of the civil case until Gupta’s criminal trial is complete, likely by the end of April. But he said he would allow depositions of witnesses who already testified in Rajaratnam’s trial, including Blankfein and former Galleon portfolio manager Ian Horowitz.
Gupta’s criminal trial is set to begin April 9; the civil case is scheduled for October 1.