Both legal teams have made their closing arguments in the federal trial of Rajat Gupta, the former head of the McKinsey consulting firm, who was accused of leaking confidential information about two major American companies — Procter & Gamble and Goldman Sachs — where he sat on the board.
Gupta's fate will be largely determined by what the jury makes of his relationship with another man convicted last year of insider trading, Raj Rajaratnam.
In 2008, Raj Rajaratnam, a heavyset Sri Lankan billionaire with his own hedge fund, regularly spoke with the defendant, Rajat Gupta, a respected former CEO of McKinsey, who was born in India.
A wiretapped phone call from July 2008, which was played for the jury, shows the two men had a warm relationship at one time.
Today, Rajaratnam is now serving an 11 year prison sentence, the harshest punishment ever for insider trading in the United States.
And Gupta is hoping to avoid a similar fate.
Investigators tapped Rajaratnam’s phone lines for eight months, but the heart of the prosecution's case against Gupta is drier, paper evidence - call logs and records of stock trades.
Fordham University law professor Steve Thel said when you connect the dots, a pattern emerges.
“You have information that very few people knew about - that by all accounts everyone who did know about it knew it was supposed to be confidential,” Thel said. “And a set of telephone calls coming very close to the time of information, and trades following very quickly thereafter, is fairly powerful circumstantial evidence.”
In one instance in September 2008, Gupta allegedly called his friend just seconds after a Goldman Sachs conference call ended, and minutes before the stock market closed, to tell him investor Warren Buffett was putting $5 billion into Goldman Sachs.
Rajaratnam immediately bought $43 million worth of Goldman stock. The next day, the news became public, and Rajaratnam made $1 million profit, prosecutors said.
In closing arguments, Gupta's attorney, Gary Naftalis, tried to poke holes in the government's case.
Naftalis said the friendship between the two men had soured by the time of the alleged tips, over a bad investment where Gupta lost $10 million, and he no longer trusted Rajaratnam.
And if they had the power to tap phone calls, Naftalis asked, how come investigators never produced a smoking gun? All the evidence was circumstantial.
Margaret Finerty, a former judge and prosecutor now in private practice, says circumstantial evidence is not necessarily weak evidence.
“If you have enough of it and it is strong and persuasive in my experience I have often found that it can often be more compelling than direct evidence,” Finerty said.
The charms helped Gupta on his way to the top of the corporate world were on display each day in court. Gupta chatted occasionally with the courtroom artists, and always had a large number of family and friends sitting in the benches behind him.
When his attorney finished his arguments, Gupta patted him on the back.
It's now up to the 12 men and women to determine whether this corporate insider was also an inside trader.