David Smyth at the Cady Bar The Door blog has a pretty plausible take as to what prompted DOJ to indict Rajat Gupta well after the SEC's civil case against him had collapsed. Here's some of the relevant analysis:
I think the delay in the criminal case against Gupta is explainable if one assumes two things are true: First, that a criminal prosecutor would much rather go to trial in a case like this with incriminating taped conversations than without. It makes sense; proving a case beyond a reasonable doubt is no easy trick. Insider trading cases can be very hard to prove, and one can imagine that the prosecutors in the Southern District of New York would want to have the best evidence possible before walking onto that big stage.
The second key assumption is that prosecutors made a final run at trying to get Rajaratnam to flip on Gupta just before Rajaratnam was sentenced. It’s hard to know if this is true, but Rajaratnam did recently submit to a wide-ranging interview with Newsweek magazine in which he revealed that prosecutors had asked again for his cooperation against Gupta....
To me, one of the interesting questions in this involves the lobbying of the prosecuting agency, DOJ, by the investigating agency, the SEC, to commit to a criminal case. Once the SEC had lost on the administrative proceedings (which it may have begun because DOJ was unwilling to indict), it may have presented DOJ with something of an ultimatum. We'll never know.
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