India-born fallen Wall Street titan Rajat Gupta should be ordered to reimburse to Goldman Sachs $6.90 million of legal fees incurred in his insider trading case, the investment bank has said, telling a court here that it is "entitled" to the amount.
The US government has also written to the District Court in the Southern District of New York to grant Goldman's request to be reimbursed by its former director Gupta the amount it paid in legal fees and related costs in connection with the investigation of his insider trading case.
In a motion filed in court, Goldman said it has been a "victim" of 64-year-old Gupta's criminal conduct and violation of his duties as the firm's director.
"As a result of Gupta's conduct, Goldman Sachs has incurred nearly $7 million in external legal fees and costs in conducting an internal investigation, in responding to numerous government requests in parallel criminal and civil investigations and proceedings, and in attending to other resulting legal matters," the investment banking giant said in court papers.
"Goldman Sachs is entitled to... and now seeks reimbursement of those legal fees and related costs that were a direct and foreseeable result of Gupta's offence," it said.
"The Court should award Goldman Sachs 6.90 million dollars in restitution for legal fees and related costs."
Manhattan's federal prosecutor Preet Bharara , on behalf of the government, said in a separate filing to the court that "the government respectfully submits that Goldman, as the 'victim' of Gupta's crimes, is entitled to recover all attorney fees" that were incurred by the investment bank due to Gupta's offences.
Goldman filed its motion in court in reply to Gupta's submission a week ago that he should not be required to pay the legal fees and other expenses to Goldman since the fees is for work that was not necessarily incurred during "participation in the investigation or prosecution" of his insider trading case.
Gupta is appealing his conviction on insider trading charges and earlier this month was granted his appeal to stay out of prison on bail pending appeal.
The former McKinsey head was slapped a $5 million fine and sentenced to two years' imprisonment.
Goldman said it had engaged the services of a law firm in 2009 after it was brought to its notice that Gupta had allegedly provided confidential company information to hedge fund founder Raj Rajaratnam.
Over the next three years, the law firm provided services to Goldman, including conducting fact-finding regarding Gupta's conduct, representing Goldman and its directors, officers and employees in responding to criminal and regulatory enforcement investigations and the resulting prosecutions of Gupta and Rajaratnam.
"Goldman Sachs faced significant legal demands in connection with these matters," it said.
Goldman added that it incurred expenses and required legal assistance in responding to approximately 27 grand jury subpoenas and document requests from the US Attorney's Office and the Securities and Exchange Commission (SEC), responding to six subpoenas from Gupta himself, collecting and reviewing millions of documents, and producing over 400,000 pages of material in over 100 separate document productions.
The law firm also represented Goldman Chairman and CEO Lloyd Blankfein in preparation for and testimony at Gupta's trial in June this year.