Lawyers for Goldman Sachs Group director Rajat Gupta, showcasing another pillar of their defense, tried to cast doubt Friday on government claims that corporate information allegedly passed by Gupta to hedge-fund manager Raj Rajaratnam was actually confidential.
Gary Naftalis, Gupta's lawyer, quizzed Goldman Sachs Chief Executive Lloyd Blankfein about whether it was publicly known in July 2008 that Goldman Sachs was considering buying a commercial bank. As part of his questioning, Naftalis showed jurors several analyst reports from the time that mentioned meetings with senior Goldman Sachs managers.
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Former Goldman Sachs Group Inc board member Rajat Gupta (right) arrives at Manhattan Federal Court with lawyer Gary Naftalis today.
Prosecutors have alleged that Gupta confirmed to Rajaratnam, co-founder of Galleon Group, rumors that the investment bank's directors had discussed the possibility of acquiring a bank or an insurer at a strategic meeting in St. Petersburg, Russia, in late June 2008. The alleged tip occurred on a July 29, 2008, wiretapped phone conversation: the only call captured on tape between the two men and played earlier in the trial. However, Rajaratnam never traded on the information, prosecutors said.
Naftalis's line of questioning came in the third day of testimony by Blankfein, one of the last witnesses expected to be called by the government. Prosecutors are expected to rest their case Friday. "Items your senior management disclosed to analysts are no longer confidential under Goldman's confidentially policy?," Naftalis said.
"Yes," Blankfein said.
Prosecutors have alleged that Gupta, also a former director of Procter & Gamble Co., secretly provided confidential information about Goldman Sachs and P&G to Rajaratnam, who was convicted of insider-trading charges last year and sentenced to 11 years in prison. Gupta has pleaded not guilty to conspiracy and securities-fraud charges.
Blankfein testified earlier this week that items discussed by the company's board were confidential and that he never authorized Gupta to provide information from board discussions to anyone outside the investment bank.
To read more, go to The Wall Street Journal
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