India-born former Goldman Sachs director Rajat Gupta can remain free on bail pending the appeal of his insider trading conviction, a court has said.
Gupta was convicted of insider trading charges and was sentenced to two years in prison and fined 5 million dollars in October.
According to the Wall Street Journal, the two-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan didn't immediately explain its reasoning for allowing Gupta to be freed on 10 million dollars bail.
A lower court judge previously had said he must begin serving his sentence before the appeal is heard, the paper said.
According to the Journal, circuit Judge Jose A. Cabranes told lawyers for Gupta and the government to be ready to file written arguments within 45 days, indicating the court will hear the appeal on an expedited schedule.
Before Cabranes spoke, Gupta's lawyer Seth Waxman told the judges that the appeal raised significant issues, entitling Gupta to remain free, the paper said.
Waxman said the trial judge, Jed Rakoff, had refused to let the jury see 'classically admissible evidence that went to the very heart of the case.'
According to the paper, he said the testimony, if permitted at trial, would have countered government's claims that Gupta fed Raj Rajaratnam inside information just seconds after Goldman Sachs' board calls.
The ruling is a major relief for Gupta, who had been charged with passing confidential information about Goldman Sachs to his business associate and hedge fund founder Raj Rajaratnam.
Rajaratnam is serving an 11-year prison term after he was convicted at trial last year.
Prosecutors said he made as much as 75 million dollars illegally. (ANI)