Thursday, 26 May 2016
Last updated 19 hours ago
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.