Scott Eells/Bloomberg NewsRajat Gupta, accused of giving information to a convicted hedge fund manager, leaving federal court on Thursday.
Federal prosecutors said Thursday that they were likely to file a new indictment against Rajat K. Gupta, possibly adding new criminal charges in the insider trading case against the former head of the consulting firm McKinsey Company.
It was “more likely than not there will be a superseding indictment” filed in the case by the end of January, Richard C. Tarlowe, an assistant United States attorney, said during a pretrial hearing in Federal District Court in Manhattan.
Mr. Gupta, who sat on the boards of Procter Gamble and Goldman Sachs, is accused of divulging confidential information about those companies to his friend Raj Rajaratnam, the convicted former hedge fund manager now serving an 11-year prison term.
The 63-year-old Mr. Gupta is fighting charges of securities fraud and conspiracy and preparing for an April 9 trial. On Thursday, he appeared in court, flanked by a team of five lawyers.
Judge Jed S. Rakoff listened Thursday as the two sides sparred over a range of issues. Earlier this week, Mr. Gupta’s lawyers filed legal papers seeking to dismiss certain counts against their client, suppress the use of wiretap evidence and force the government to clarify its indictment.
During the two-hour hearing, Mr. Gupta’s primary lawyer, Gary P. Naftalis, pressed the government to clarify language in its indictment that suggested his client had leaked information about companies other than Procter and Goldman to Mr. Rajaratnam, the former head of the Galleon Group.
Mr. Tarlowe said the other company was J.M. Smucker, which is known for its jellies and jams.
In June 2008, Smucker said it was acquiring Folgers Coffee from Procter Gamble for about $3 billion. The government said previously in its indictment that the day before this announcement, Mr. Rajaratnam told a colleague that he had learned from a director of Procter Gamble that Smucker was buying Folgers.
On the wiretap issue, Judge Rakoff indicated that chances were slim that he would bar the government from playing secretly recorded phone conversations at Mr. Gupta’s trial. His lawyers are arguing that the law does not permit federal authorities to use wiretaps in insider trading cases.
Judge Rakoff cited the Rajaratnam trial, in which Judge Richard J. Holwell allowed the government to use wiretap evidence.
“Looking at it realistically, if I were the defense, I would not be optimistic on this particular motion,” Judge Rakoff said.
Though Procter was a focus of Thursday’s hearing, the trial is also expected to center on Goldman, where Mr. Gupta served as a director for four years.
The government has accused Mr. Gupta of leaking the bank’s earnings and other information to Mr. Rajaratnam, including Warren E. Buffett’s $5 billion investment in Goldman during the financial crisis.
Goldman executives could be called to testify, including the firm’s chief executive, Lloyd C. Blankfein, who testified in the Rajaratnam case.
The government has its own Goldman connection in the Gupta trial. Mr. Tarlowe, one of the two prosecutors, is a former investment banker at Goldman.
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