Goldman CEO Testifies Against Gupta, Calls Info. 'Confidential'

Jun 5 2012 | 1:28pm ET

Goldman Sachs CEO Lloyd Blankfein testified yesterday at Rajat Gupta's insider-trading trial that Gupta was not authorized to discuss details of Goldman board of directors meetings.

Blankfein, who took the stand 15 months after doing so at the trial of Galleon Group founder Raj Rajaratnam, told the jury about Goldman's policies. Gupta, a former member of Goldman's board, is accused of passing along to Rajaratnam confidential information discussed at Goldman board meetings.

"You're not supposed to reveal the confidences of what was discussed in a board meeting," Blankfein said. "Anything that was discussed at the board meeting is a confidential fact."

Blankfein read from Goldman's corporate governance guidelines—"the proceedings and deliberations of the board and its committees shall be confidential"—and testified about several board meetings that Gupta is alleged to have tipped Rajaratnam about. Among those tips were allegedly advance notice of Goldman's discussions about buying a commercial bank or American International Group, and Berkshire Hathaway's 2008 investment in the bank.

Blankfein also discussed at length Goldman's earnings and projections, which Gupta is also alleged to have told Rajaratnam about.

Blankfein's testimony, which is scheduled to resume tomorrow after a one-day break in the trial to allow U.S. District Judge Jed Rakoff to give a speech in Washington, D.C., interrupted the continuing testimony of former McKinsey & Co. partner Anil Kumar, a former friend and business associate of both Gupta and Rajaratnam.

Kumar told the jury about Gupta's investment in a Galleon hedge fund, Voyager. That fund's collapse in 2008 strained the relationship between Gupta and Rajaratnam, and Kumar testified that Gupta threatened to sue Rajaratnam in 2009—after the government alleges he stopped tipping the Galleon chief, who was arrested later that year.

"He said he'd discovered something that was quite distressing," Kumar said, discussing a visit to his apartment by Rajaratnam in early 2009. "Rajaratnam had removed some of the money for the fund for himself."


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.