The Economics of Blind Justice

When I opened Tuesday’s (June 19th) Journal, I was struck by an interesting dichotomy between two articles. The front page profiled a picture of “The Rocket”, front and center, (Clemens Acquitted in Perjury Case) and his perjury trial victory. Flipping ahead a few pages (well actually clicking – I find reading a physical newspaper on the subway during rush hour traffic virtually impossible) to the popular ‘Money and Investing’ section, I came across an article describing the guilty verdict that had been passed in the Rajat Gupta insider trading case. (Rajat Gupta - Guilty)

Save for what mass media told me, I cannot speak eruditely or with certainty to the validity of the two jury’s decisions. However, I am perfectly capable of formulating an opinion based on the information conveyed. Presented below is an overly simplified and perhaps bias tinged (although I tried to avoid this) synopsis of the two cases:

  • At stake in both cases: A man’s freedom
  • Defendant 1: Rajat Gupta; an orphan from India, who attended Harvard on scholarship and rose to be head of Mckinsey and Co. Accused of passing insider information gleaned from his position as a director on Goldman’s board, to head of Galleon Group, Raj Rajaratnam(convicted last year)
  • Defendant 2: Roger Clemens; one of MLB’s most successful and dominant pitchers, with over 350 wins and career ERA of 3.12. He also won 7 Cy Young awards and was an 11 time MVP. Identified by former trainer Brian McNamee as being on the Mitchell Report for taking performance-enhancing steroids. Indicted by the DOJ on several charges, including perjury and obstruction of justice.
  • Quality of Evidence submitted in both cases (now here is where personal opinion and bias may warrant a difference in opinion): Circumstantial at best. According to the WSJ on the Gupta Case
    The deliberations—in one of the most important cases on insider trading in Wall Street's history, involving a particularly prominent defendant—were challenging for jurors because the government's case was built almost entirely on circumstantial evidence.
    And on the Clemens trial,
    Marc Mukasey, a former federal prosecutor who once handled steroids cases, said he wasn't surprised by the outcome, given the prosecutors' struggles with their chief witnesses' credibility. "I think the government's case had a lot of proof problems […]."
  • The Verdicts: Gupta was convicted on three counts of securities fraud and one count of conspiracy. Clemens was acquitted on all charges of lying to Congress.

Now comes the time to play devil’s advocate (pun somewhat intended I suppose). On the face of it, two jurys comprised of the defendants peers (jury selection is entirely different can worms, best discussed in a separate forum) had relatively circumstantial evidence to decide the fates of two wealthy, high profile men in cases of fraud and perjury. For arguments sake, let us suppose they were both guilty. In reference to the Clemens case (but wholly applicable to either situation), Hall of Famer Goose Gossage captures the sentiment perfectly -

O.J Simpson, did you believe he didn’t kill those two people?
. So if justice is blind and one is innocent until proven guilty – how can two similar cases, yield such dramatically different results?

I don’t want to point to the vilification and ostracism of Wall Street and it’s more powerful, wealthier titans. I’m sure that there is strong negative sentiment towards the 1% (especially those who have made their money on the street). I don’t want to insinuate that the adoration with which the masses view celebrity athletes (who often make an equally ungodly amount of money) and put them on a pedestal, often allows them greater leeway in the eyes of the law. While these are all questions a rational, curious individual might ask or assert – I’m trying to take as neutral a stance on the subject. I want to turn it over to all the monkey’s out there: the one’s who have made it and will one day be as baller as Rajat Gupta (monetarily anyway), the one’s struggling to make ends meet at school (with aspirations of making it) and the one’s who’ve already run their race and are wiser for it – everyone, the entire spectrum: what happened? Do you think there is credence to the argument that a significant bias may have been the cause of such diametrically opposite outcomes in what seem like similar situations(to me anyway)? Or on the flip-side, is Wall Street just so used to being portrayed as the villain that me/we/whoever can’t see the outcome of two uncorrelated cases in anything but a prejudiced light? Just curious?

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