When does an insider trading case turn from civil to criminal? It's a question that has confounded white-collar defense lawyers for years, reports ThomsonReuters.
For Gary Naftalis, a partner at Kramer Levin Naftalis & Frankel, the question is more than academic. As you'll no doubt recall, Naftalis, a dean of the white-collar defense bar, represents Rajat Gupta, the former Goldman Sachs Group director who has come under scrutiny in the government's enormous hedge fund insider-trading investigation.
The Securities and Exchange Commission first brought charges against Gupta in March, accusing him in a rare administrative proceeding of giving tips about Goldman to Galleon Group hedge fund manager Raj Rajaratnam. Naftalis called the allegations "baseless" and complained that Gupta had not been accused of sharing in any of the profits made by Rajaratnam. There was no evidence, Naftalis asserted, that Gupta had received any benefit from allegedly leaking information to the Galleon founder.
The SEC, however, claimed that Gupta was an investor in Galleon funds at the time of the alleged misconduct in the summer and fall of 2008 and "stood to benefit from his relationship with Rajaratnam."
Read more at http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=28979&terms=%40ReutersTopicCodes+CONTAINS+'ANV
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