As jury deliberates, lawyers spar over McKinsey's Gupta & Ku

None of the ex-McKinsey consultants who are intimately involved with the trial of Raj Rajaratnam will be directly affected by the verdict to be delivered by the jury sometime in the next few days. Ex-partner Anil Kumar plead guilty to related charges earlier this year, and ex-managing director Rajat Gupta still hasn't been charged with a crime. But while these guys don't have nearly as much of a stake in the verdict as does Rajaratnam, closing arguments by the defense and the prosecution betray just how much of an impact the pair have had on the trial. Attorneys on either side of the aisle—and even legal pundits in the media—have weighed in on the influences these McKinsey alumni are having on the minds of the deliberating jurors. Let's have a look at some highlights.

On Anil Kumar:

"Anil Kumar might be the most dishonest person you've ever met in your life." – John Dowd, defense attorney

"You know you can't trust Anil Kumar," said Dowd, the Akin Gump partner repping Raj Raj, in his closing arguments. This pair of quotes is generally representative of Dowd's remarks about the government's star witness, carefully constructed to portray Kumar as the "monstrous liar" whose credibility he attacked throughout the trial. "You should be offended that the government is asking you to believe Anil Kumar," the attorney continued, describing Kumar as "a man who made millions of dollars a year but squirreled away millions more in offshore accounts to avoid paying his taxes" and "a man who giggled his way through testimony about all the times he lied and cheated his friends and his business partners and the IRS."

"McKinsey naturally didn't allow these kinds of consulting arrangements." – Reed Brodsky, prosecuting attorney

"If McKinsey found out about the arrangement, then Kumar wouldn't be able to pass him those business secrets," said Brodsky in his closing arguments. Of course, "the arrangement" references the insider trading relationship Kumar had with Raj Raj; it's no surprise that McKinsey wouldn't have liked that. Here, the prosecutors employed a similar strategy to the one that saw Lloyd Blankfein take the stand to suggest that Gupta had "violated" Goldman's code of conduct. Likewise, McKinsey wouldn't have approved of Kumar's actions, which led Kumar and Raj Raj to go underground with their criminal efforts. "The defendant agreed to help Kumar conceal the payments from McKinsey," Brodsky told jurors. "And that fit perfectly within the defendant's plan. If McKinsey found out about the arrangement, then Kumar wouldn't be able to pass him those business secrets."

"Kumar testified that he founded Mindspirit with his McKinsey partner Rajat Gupta." – Dowd

We've heard all along that Kumar was Gupta's protégé and that they ran in the same business circles, but Mindspirit? Where the hell did that come from? As far as Dowd is concerned, it was a consulting boutique with a track record befitting of Kumar's deviance. The defense attorney contends that Kumar invested heavily in a company called Info USA while that company was a Mindspirit client, thereby suggesting that Kumar was using inside information in the market well before Rajaratnam ever got involved. For the record, the only 'Mindspirits' around today are spiritual and holistic healing centers. Good riddance.

On Rajat Gupta:

"Having a great reputation doesn't give you a free pass to violate the law. Nobody is above the law, no matter how good their reputation may be." – Brodsky

"Lloyd Blankfein told you about Mr. Gupta," countered Dowd. "Mr. Blankfein told you that Mr. Gupta was one of the most prominent and well-respected businessmen in the world. Mr. Blankfein told you that Mr. Gupta had a reputation for integrity that was beyond reproach. This is what Mr. Blankfein said." And maybe that's a sentiment that Brodsky agrees with: "You don't get on the board of Goldman Sachs if you don't have a great reputation and you haven't accomplished a lot in life," admitted the prosecutor. "But that doesn't change the fact that Mr. Gupta violated his duty."

"The government wants you to believe that Mr. Gupta just threw away everything he had earned and ruined his reputation for nothing at all." – Dowd

It's a good point from Dowd, who has come off as a little desperate at times in the closing phases of the trial. "You didn't hear from Rajat Gupta. You saw his picture but he didn't testify," Dowd told the jury, harping on the government's unusual legal efforts to tie Gupta to the case. A good point indeed, and also an even better reason for us all to tune in this summer; until Gupta's civil suit goes before a judge, we might never hear his side of the story.

"How strong of a message is it when someone like Mr. Gupta gets a free pass?" – Richard Roth, The Roth Law Firm

This one's a little different from the others. First of all, it comes from a lawyer with no connection to the case, a pundit serving on this CNBC discussion panel on the implications of the Raj Raj case. Secondly, Roth asks a damn good question to which there is no clear answer. "They don't have the goods yet on Gupta," answered Peter Flaherty of the National Legal and Policy Center. "If they did, they would certainly pursue this," he continued. But consider the implications of that answer: if they don't have damning evidence against Gupta yet, there's a good chance that they never will; and if they never will, has Gupta's name been wrongly dragged through the mud by the government? Say Roth is right, though, that Gupta is simply getting "a free pass" from prosecutors. If that's true then it means that the biggest fish, leaders of secretive, prestigious companies like McKinsey and Goldman Sachs, might be too big to prosecute.

For more information:
Closing arguments, U.S. v. Raj Rajaratnam
CNBC Video: Watching for the Galleon Verdict (via NYT)
NYT