US Appeals Court rejects Rajat Gupta's rehearing plea

Rajat GuptaA federal appeals court in New York on Monday denied a petition by Rajat Gupta, the former Goldman Sachs director currently serving a two-year prison, to rehear his insider trading conviction.

A full panel of the 2nd US Circuit Court of Appeals denied India-born Gupta's petition for "panel rehearing, or, in the alternative, for rehearing en banc".

But the court responded in its order, "The panel that determined the appeal has considered the request for panel rehearing, and the active members of the court have considered the request for rehearing en banc. It is ordered that the petition is denied."

This is yet another blow to Gupta's efforts to have his insider trading case reheard.

The 65-year-old Gupta reported to the minimum security satellite camp at FMC Devens in Ayer, Massachusetts on 17 June to begin his two-year prison sentence.

His prison is next to the medical centre where his one-time friend and business associate hedge fund founder Raj Rajaratnam is serving his 11-year prison sentence for running the massive insider trading scheme.

Gupta's petition for rehearing was pending before the appeals court when he reported to prison last month. He had said in court papers that he will seek review by a higher court if his rehearing petition is denied by the appeals court.

Apart from the two-year prison term, Gupta has been ordered to pay $5 million in fines and another $6 million in restitution to Goldman Sachs. Further, he also has been ordered to pay $13.9 million as penalty in the US Securities and Exchange Commission's parallel insider trading case against him.

A three-judge panel of the appeals court had in March upheld Gupta's conviction by a district judge on insider trading charges and had denied his bid for a new trial.

In April, Gupta had filed a combined petition for rehearing and rehearing en banc, requesting that he be allowed to remain free on bail till his petition is decided on by a full bench of the appeals court.

Gupta had argued that his insider trading case should be reheard by the entire appeals court bench since "critical evidence" in his favour was excluded at trial.

The Harvard-educated Gupta is one of the most high-profile Wall Street executives to be convicted of insider trading.

The charges that brought against him by India-born federal prosecutor Preet Bharara, who gained notoriety in his home country after indicting Indian diplomat Devyani Khobragade for alleged visa fraud.