Millennium Post

CEO says Rajat couldn’t divulge info

Goldman Sachs CEO Lloyd Blankfein testified on Friday that the company’s former director Rajat Gupta, accused of insider trading, was not authorised to divulge ‘market-moving’ information he received as a board member to outsiders before the public announcements.

Blankfein, 57, returned to the witness stand on Thursday in the insider trading trial of 63-year-old India-born Gupta.

He was asked by Assistant US Attorney Reed Brodsky whether Gupta had his permission to share with people outside Goldman about what he learned at board meetings.

‘Did you authorise Gupta to disclose on March 12, 2007, any information that was learned at the audit committee meeting to any outsider?’ Brodsky asked.

‘No,’ Blankfein said. The Goldman CEO said Gupta was not authorised to disclose information either of the board’s audit committee in March 2007 or other meetings where the firm discussed quarterly results before it was made public.

Gupta has been accused of sharing information he learnt while sitting on the boards of Goldman and consumer giant Proctor and Gamble with convicted Sri Lankan billionaire Raj Rajaratnam.

Prosecutors say Gupta shared with the Galleon hedge fund founder information about Warren Buffett’s five billion dollar investment in the banking as well as quarterly earnings seconds after he learnt about them at company board meetings.

Gupta has denied any wrongdoing. Blankfein said the bank’s audit committee is routinely briefed on the firm’s profits, expenses, taxes, capital and dividend before the public release of the data.

‘Was the information heard at audit committee meetings confidential?’ Brodsky asked.


Berkshire Hathaway’s India-born head of reinsurance business Ajit Jain, seen as a possible successor to billionaire investor Warren Buffett, will testify through a video deposition for his ‘close friend’, former Goldman Sachs director Rajat Gupta in his insider trading trial.

As the prosecution wraps up its case against Gupta, his defence team expects to begin its case on Friday by showing a recorded deposition of Jain, a spokeswoman for the federal court in Manhattan said. Jain, a former McKinsey employee, is among a list of 20 witnesses who will testify for Gupta in his trial. Jain is likely to testify as a character witness for the ex-McKinsey head.

The India-born top executive at Berkshire has previously been been interviewed by Gupta’s defence team and has also met the prosecutors.

The prosecution is expected to wrap up its case on Friday after the defence finishes cross examining the star government witness Goldman Sachs CEO Lloyd Blankfein.

The trial of Gupta, who is charged with passing secret information about Goldman and Proctor and Gamble to convicted hedge fund founder Raj Rajaratnam, is in its third week.

Judge Jed Rakoff, who is presiding over the case, has not been happy about the slow pace of the trial, which began on 21 May.

Rakoff has described proceedings in court as ‘excruciating’, particularly when the prosecution presented extensive phone records, emails and company information to the jury.
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