Rajat Gupta (left) with lawyer Gary Naftalis at the Manhattan federal court on Wednesday. (Reuters)

New York, Oct. 28: Gary P. Naftalis is an elder statesman among the close-knit fraternity of defence lawyers, federal judges and government prosecutors in white-collar law.

In his more than 40-year career, Naftalis has been called on to defend embattled chieftains, troubled multibillion-dollar banks and even the former owner of the New York disco Studio 54. He is now representing Rajat K. Gupta, the former director of Goldman Sachs and Procter & Gamble who is accused of leaking company secrets to a billionaire hedge fund manager.

With his dishevelled appearance and affable demeanour, the 69-year-old Naftalis, a partner at Kramer Levin Naftalis & Frankel, is a practitioner of handling the corporate scandal.

“He is one of the best white-collar defence lawyers in the country,” said Theodore V. Wells Jr, a criminal defence lawyer at Paul, Weiss, Rifkind, Wharton & Garrison. “He is excellent before judges and juries, and he is a master of strategy.”

At his elite level, securities litigation is a small world.

In the late 1980s, Naftalis successfully convinced Rudolph W. Giuliani, then the US attorney who later became mayor of New York, to not indict the brokerage firm Kidder Peabody. He also faced off against Eliot Spitzer, defending Kenneth Langone, the head of the New York Stock Exchange’s compensation committee, on charges related to the compensation of Richard Grasso, the chairperson.

Naftalis also has close ties to Jed S. Rakoff, the federal judge who will preside over Gupta’s case. Their friendship dates back more than three decades to when they both worked as prosecutors at the US attorney’s office in Manhattan. Rakoff even presided over the 2009 wedding of one of Naftalis’s sons, who was also a clerk for the federal judge.

“It is inevitable that the judiciary, especially the federal judges, will know the prominent trial lawyers,” said Stephen Gillers, a professor at New York University Law School, who knows both men. “I’ve been at a lot of weddings where Jed Rakoff officiated, so if that was the rule he’d be out of circulation.”

Such connections are common in securities litigation, where lawyers train at the same schools, work at the same firms and run in the same social circles.

Growing up in Newark, Naftalis attended Rutgers as an undergraduate, later pursuing a master’s degree at Brown in the hopes of becoming a history professor. After completing the degree, he switched directions and went to Columbia Law School.

After graduation in 1967, he worked at the US attorney’s office in Manhattan. Roughly six years later, he began his career as a defence lawyer, at a small boutique firm. Two of his four children with his wife, Donna, followed his path. One son is an assistant US attorney in Manhattan and the other an associate at Wachtell, Lipton, Rosen & Katz.

Over the years, Naftalis has developed a reputation for his unassuming style and low-key intelligence. He rarely raises his voice, peppers his questions with humour and doesn’t bother with the hand-tailored suits favoured by some high-flying defence lawyers.

While defending the former chief executive of Walt Disney, Michael D. Eisner, against a shareholder suit, he relied on humour to charm jurors. The case centred on the $140-million severance package that Eisner handed out to the dismissed president, Michael S. Ovitz.

During a cross-examination, Naftalis began to read documents that said executive compensation in media is typically higher than in other industries. He asked whether the expert witness agreed with the assessment. He responded with a vehement no.

Naftalis then asked if he would change his mind if the opinion came from a judge in a Delaware court, where the case was being tried. The witness responded yes, and the courtroom erupted in laughter.

After an excruciating three-month trial, Eisner prevailed on all counts.

“He is blessed with a great sense of humour and irony that he uses effectively in court,” said Paul R. Grand, a defence lawyer at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer.

Naftalis is known for avoiding trial as well. In the 1990s, he helped Salomon Brothers avoid criminal charges stemming from a bond scandal. He persuaded the New York district attorney to forgo criminal charges against the city for the death of two firefighters who had been killed in a blaze at the Deutsche Bank building, which had been damaged in the September 11 attacks.

It’s unclear what type of defence Naftalis will mount for Gupta, who has pleaded not guilty to all charges.

He notched a small victory for his client this summer. In July, the Securities and Exchange Commission filed an administrative action against Gupta, contending insider trading.

Naftalis shot back with another lawsuit, asking to move the matter to federal court; the lawyer argued an administrative proceeding would deny Gupta his constitutional right to a jury trial. Judge Rakoff, who also presided over that matter, ruled that the suit could move forward, calling the SEC’s action “cavalier”.

On Wednesday, Naftalis arrived in his typical late fashion to Gupta’s court appearance. The warm, congenial nature for which he’s known quickly emerged. After seeing Gupta seated alone at the defence table — his client’s shirt casually unbuttoned after having been relieved of his tie during processing — Naftalis immediately asked his staff to collect Gupta’s red tie and his suit jacket, which the former Goldman director promptly donned.