Because we are different.

Gupta opposes Goldman’s reimbursement demand

15 December 2012

press trust of india
NEW YORK, 15 DEC: India-born former Goldman Sachs director Rajat Gupta has said he should not be required to pay the global investment banking firm $6.78 million it is asking as reimbursement for legal fees and other expenses incurred by it in connection with his insider-trading case.
In a lengthy 43-page motion filed in US District Court here yesterday, Gupta has opposed Goldman's demand for “restitution” of legal fees and other expenses totalling $6.78 million.
Gupta, 64, said Goldman has not identified and submitted “competent evidence” of the legal fees that it can be reimbursed for.
Instead the company has submitted 540 pages of billing records for a three-year period from December 2009 to November 2012 which do not contain specifics of the legal tasks performed by Goldman in connection with Gupta's case. Gupta said Goldman is seeking reimbursement of fees for work that was not necessarily incurred during “participation in the investigation or prosecution” of Gupta.
This amount includes more than $3 million of fees incurred before hedge fund founder Raj Rajaratnam's trial concluded in May 2011 and before the US attorney's probe of Gupta “kicked into high gear,” Gupta's lawyer Richard Davis said in court papers.
Goldman is also seeking reimbursement of substantial fees for work on Securities and Exchange Commission matters, both before and after Rajaratnam trial as well as for work done over the last five months after the criminal case against Gupta ended.
Gupta also argues that Goldman is not entitled to restitution of legal fees it incurred relating to the SEC's administrative action against him.
Legal fees that Goldman incurred in relation to the investigation and prosecution of Rajaratnam also do not qualify for reimbursement.  
“Simply stated, Goldman is entitled to restitution of only those fees it can demonstrate were necessarily incurred in connection with specific requests by the government or were otherwise required to be done in the investigation or prosecution of the Gupta case,” Mr Davis said.
Gupta said he was informed by the government just one week before his sentencing in October that Goldman was claiming an entitlement to all its legal fees incurred in the course of proceedings arising from Gupta's conduct, in addition to 25 per cent of the compensation he received as Goldman director.
Goldman is seeking restitution of at least $55,472 representing the cash compensation paid to Gupta as a director from November 2006 to May 2010.
“This request should be denied because Goldman has already forfeited to itself approximately one million dollars of options and restricted stock non-cash compensation it paid to him as a director. Thus, it has already obtained well over 75 per cent of Gupta's total director compensation,” the motion said. Gupta added that Goldman has merely submitted bulk bills with no effort to organise them in categories, or otherwise segregate what is recoverable and what is not.
Gupta is appealing his conviction on insider trading charges and earlier this month was granted permission to stay out of prison on bail pending appeal.
Gupta was slapped a $5 million fine and sentenced to two years' imprisonment. His jail term was to begin on 8 January next year, but he would now remain free on a $10-million bond till the court rules next year on his request to overturn his conviction.