SEC wants to question Rajaratnam, his brothers in Gupta case

SEC lawyer Kevin McGrath has told US District Judge Jed Rakoff the regulator wants to call as witnesses Rajaratnam, "one or both" of his brothers as well as "current and former employees" of Goldman Sachs and Proctor and Gamble at Gupta's civil trial, which is scheduled to begin on October 1, 2012.

"We have a long list of witnesses including the defendant and one or both of Rajaratnam's brothers," McGrath said.

Rajaratnam's brother Rengan was listed by federal prosecutors as an unindicted co-conspirator during Rajaratnam's criminal trial.

His other brother has been identified as Ragakanthan Rajaratnam. Neither of the brothers has been charged with criminal wrongdoing.

McGrath told the Manhattan district court last week that the SEC would also seek to call as witnesses and question under oath Goldman Sachs and Procter & Gamble board members.

Rakoff has asked Gupta's lawyers and SEC attorneys to submit a list of their "top 10" witnesses whom they would want to question under oath.

The judge said he would take a decision by the end of the year on whether to allow the interviews to be conducted before Gupta’s criminal trial in the insider trading case slated to begin in April next year.

McGrath has argued in court that depositions in the civil case should be delayed until after Gupta's criminal trial as there may not be a need to conduct depositions of some individuals if they testify at Gupta's criminal trial.

Gupta's lawyer Gary Naftalis has said that depositions should proceed now, saying the SEC had made prior "tactical" decisions about when and where to bring a case against Gupta.

Gupta was charged last month by US prosecutors and the SEC with passing confidential Goldman and P&G information he received as board member to his billionaire friend Rajaratnam, who then made millions of dollars in illegal profits through the insider information.

Hedge fund Galleon founder Rajaratnam has been sentenced to 11 years in prison for his role in one of the largest insider trading schemes in US history.

Harvard alumnus Gupta has pleaded not guilty to the charges and will go on trial in April next year in the criminal case filed against him by US prosecutors.

His trial in the civil lawsuit, which SEC slapped on him the same day he was charged criminally by federal prosecutors on insider trading  charges, will begin in October next year.

The SEC lawsuit alleges that Gupta tipped Rajaratnam about a five billion dollar investment by Warren Buffet's Berkshire Hathaway in Goldman Sachs.