Blankfein Testifies In Galleon Insider Trading Case
In calling Blankfein as a witness, prosecutors in the office of U.S. Attorney Preet Bharara in Manhattan said they don’t want Blankfein to be questioned about “whether Goldman Sachs is presently the subject of any pending investigations by either the Department of Justice or the U.S. Securities and Exchange Commission” and whether the bank bears any responsibility for the 2008 financial crisis.
Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc. (GS), testified at Galleon Group LLC co-founder Raj Rajaratnam’s insider-trading trial that former Goldman board member Rajat Gupta violated the firm’s confidentiality policies.
Blankfein took the stand as a witness for the prosecution before U.S. District Judge Richard Holwell in Manhattan federal court at about 10:30 this morning. He said Gupta violated Goldman policies when he revealed details of the firm’s strategic planning discussions to Rajaratnam in a wiretapped phone call in July 2008.
Prosecutors called Blankfein to help build their case that Rajaratnam traded on inside information about Goldman Sachs he obtained from Gupta. On the stand, Blankfein identified a photo of Gupta and said Gupta was on Goldman’s governance, audit and compensation committees.
Rajaratnam, 53, is in the third week of his trial in the largest crackdown on hedge-fund insider trading in U.S. history. The Sri Lankan-born money manager is accused of making $45 million from tips leaked by corporate insiders and hedge fund traders. He denies wrongdoing, saying he based his trades on research.
Rajaratnam got a tip from Gupta about a $5 billion investment in the firm by Warren Buffett’s Berkshire Hathaway Inc., and Gupta allegedly passed the news immediately to Rajaratnam, who bought shares, prosecutors told the jury in opening statements.
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Background:
Rajat Gupta: Timeline Of Insider Trading Case Against Former Goldman Sachs Director
Mar 23, 2011 at 4:26 PM
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