Gupta Took Fifth When Questioned By SEC

Mar 24 2011 | 4:17pm ET

Rajat Gupta, the former McKinsey & Co. chief accused of passing confidential information about Goldman Sachs to Raj Rajaratnam, invoked his right against self-incrimination when the Securities and Exchange Commission sought to question him.

Gupta, who served on Goldman's board at the time he allegedly tipped Galleon Group founder Rajaratnam about the bank's earnings and an investment by Berkshire Hathaway, "took the Fifth Amendment when he spoke to the SEC" and "wasn't deposed when the SEC asked for his deposition," prosecutor Reed Brodsky told U.S. District Judge Richard Holwell yesterday morning. The revelation occurred before the jury was brought in to hear the day's testimony, including from Goldman CEO Lloyd Blankfein, who testified that Gupta had violated firm policy by telling Rajaratnam about matters discussed by its board.

Gupta's invoking of the Fifth Amendment came up after prosecutors asked Rajaratnam's attorneys if they planned to introduce Gupta's "Wells submission" to the SEC into evidence. Gupta is expected to be called as a defense witness later in the trial.

Rajaratnam's chief lawyer, John Dowd, said he did not plan to introduce the SEC submission.

Gupta's Wells submission is at the center of his lawsuit against the regulator. Gupta made the voluntary submission in an effort to keep the SEC from filing charges against him. It didn't work; the agency earlier this month filed an administrative proceeding against him. Gupta's lawyer called that move unfair, saying the SEC never indicated an administrative proceeding was under consideration and that all other 27 civil defendants in the Galleon case have been sued in federal court.

"We repeatedly advised the SEC that Mr. Gupta was prepared to testify fully as soon as the Rajaratnam trial concluded," Gupta's lawyer, Gary Naftalis, said. "Regrettably, the SEC was unwilling to wait this brief period of time in order to have a full and fair factual record."

Gupta has repeatedly denied wrongdoing in the case.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.