Friday, 27 May 2016
Last updated 35 min ago
May 21 2012 | 1:50pm ET
Former McKinsey & Co. chief Rajat Gupta went on trial today in New York, charged with passing confidential information to Galleon Group founder Raj Rajaratnam.
The trial, which could last up to four weeks, began with a morning conference before jury selection began. The panel that will decide Gupta's fate—he faces decades in prison if convicted—is expected to be seated this afternoon, followed by opening statements later today.
This morning, prosecutors looked beyond those trial stages, indicating that they will call current and former Goldman Sachs board members as witnesses this week. Former Vice Chairman Byron Trott and current director Bill George, a Harvard Business School professor, lead off a Goldman-heavy series of witnesses expected to include Goldman CEO Lloyd Blankfein and Goldman President Gary Cohn.
Gupta, who served on Goldman's board, is accused of passing confidential information about the company to Rajaratnam, a long-time friend and business partner. At Rajaratnam's trial last year, which resulted in the hedge fund manager's conviction and sentencing to 11 years in prison, Blankfein testified that Gupta had violated Goldman policies in telling Rajaratnam that Goldman might look to buy a commercial bank or troubled insurance giant American International Group. Blankfein told the Rajaratnam jury that that information, and other tips Gupta passed, were confidential.
Gupta's lawyers are expected to argue that their client's friendship with Rajaratnam had soured before he is alleged to have tipped the hedge fund manager off. Gupta is also accused of passing confidential information about another company on whose board he served, Procter & Gamble.