It's too much: Gupta contests $6.78 m fee
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 on Friday, 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 through 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 the 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 for 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,” 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 cash compensation paid to Gupta as a director. 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.