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&lt;p&gt;Rajat Gupta, the disgraced former managing director of McKinsey &amp;amp; Company, sued the SEC today for &quot;unfairly and unconstitutionally&quot; accusing him of insider trading in civil court.  As has been widely reported on Consult THIS and elsewhere, Gupta was implicated in the criminal trial of Raj Rajaratnam, the Galleon Group founder who sourced privileged information from Gupta, other McKinsey consultants, and a host of other contacts.&lt;/p&gt;&lt;p&gt;Gupta&#39;s claim, filed today in federal court in Manhattan, regards the use of evidence against him in a trial in which he is not involved.  This week in the Raj Rajaratnam trial, government prosecutors played a secretly-recorded conversation between Gupta and the defendant that they argue shows clear evidence of insider trading between the two.  At the time of the recording, Gupta sat on the board of Goldman Sachs; in the recording, Gupta is heard recounting the interactions of the board and the moves they were considering, including the acquisition of several major commercial banks.&lt;/p&gt;&lt;p&gt;Despite his obvious connection to the defendant and several of his contacts like Anil Kumar, the former McKinsey partner (and Gupta friend) who already plead guilty to similar criminal charges, no criminal charges have been filed against Gupta.  Instead, SEC prosecutors sought to punish Gupta via a different route, through the civil courts.&lt;/p&gt;&lt;p style=&quot;text-align: center;&quot;&gt;&lt;img style=&quot;display: block; margin-left: auto; margin-right: auto; border: 1px solid black;&quot; src=&quot;http://www.vault.com/VCM/articles/gupta_mad.png&quot; alt=&quot;&quot; width=&quot;552&quot; height=&quot;360&quot;&gt;&lt;em&gt;&lt;br&gt;Gupta on the warpath.&lt;/em&gt;&lt;/p&gt;&lt;p&gt;John Dowd, the lead defense attorney representing Rajaratnam in his criminal trial, said recently that Gupta&#39;s civil trial was &quot;simply an effort to destroy a favorable witness&quot; who might testify on Rajaratnam&#39;s behalf.  Dowd&#39;s suggestion is that the government lacked enough hard evidence to try Gupta on criminal charges, so it hedged its bets and filed the civil suit in order to drag his reputation through the mud without actually seeking a criminal penalty, thereby destroying his credibility and potentially even pitting Gupta and Raj Raj against one another.&lt;/p&gt;&lt;p&gt;That suggestion confirms one thing: that Gupta is guilty of some sketchy business practices, maybe even insider trading.  But whether or not there is enough clear, incontrovertible evidence to obtain a conviction (there was for Kumar and it looks like there will be for Rajaratnam) is another story.&lt;/p&gt;&lt;p&gt;Gupta&#39;s own lawyers have now taken Dowd&#39;s assertion a step further, stating that Gupta&#39;s constitutional rights&amp;mdash;not just his credibility&amp;mdash;are threatened by the civil trial.  By pursuing Gupta&#39;s downfall through the civil process, rather than the criminal, his lawyers say that &quot;Mr. Gupta would be deprived of a jury trial, the right to use the discovery procedures of the federal court to shape his defense and the protections of the federal rules of evidence, which were crafted to bar unreliable evidence.&quot;&lt;/p&gt;&lt;p&gt;So, in sum: Gupta is on the offensive after having his and McKinsey&#39;s name relentlessly dragged through the mud for several weeks, legitimately so or not.  As Bess Levin describes on &lt;em&gt;Dealbreaker&lt;/em&gt; today, many top lawyers believe that there is not, in fact, enough evidence to obtain a conviction for Gupta in a criminal court.  In her words:&lt;/p&gt;&lt;p style=&quot;padding-left: 60px;&quot;&gt;&lt;em&gt;The key takeaway here seems to be that if you act natural, if you keep things &quot;casual,&quot; like you&amp;rsquo;re just calling to say hey, shoot the breeze, mention some stuff that&amp;rsquo;s been going on at work and see what&amp;rsquo;s on tap for the weekend, you should be okay.&lt;/em&gt;&lt;/p&gt;&lt;p&gt;Even if you&amp;rsquo;re one sketchy, dirty old businessman.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;For more information:&lt;/strong&gt;&lt;br&gt; WSJ: Former Goldman Director Sues SEC Over Insider Charges&lt;br&gt; Dealbreaker: Taped Conversations Of Rajat Gupta Sharing Information About Goldman Sachs With Raj Rajaratnam Not So Bad, Say Legal Professionals&lt;/p&gt;

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