Wednesday, 22 October 2014
Last updated 10 hours ago
Jun 7 2012 | 12:31pm ET
With Goldman Sachs CEO Lloyd Blankfein attending to more important matters, the jury in the Rajat Gupta insider-trading case became more familiar with the bank's phone records and the defendant's investments with Galleon Group founder Raj Rajartanam.
Blankfein, who began his testimony on Monday, was to return to the stand today after missing yesterday's session to attend his daughter's high school graduation (there was no session on Tuesday to allow U.S. District Judge Jed Rakoff to speak at a conference in Washington, D.C.). Instead, jurors heard from a Goldman technology specialist and a former Galleon Group portfolio manager.
The former, Joseph Yanigisawa, was called to testify about the bank's phone records, which show numerous calls between Gupta, the former McKinsey & Co. chief who served on Goldman's board, and Rajaratnam, including one that prosecutors say Gupta used to tip Rajaratnam about an investment in the bank by Berkshire Hathaway.
The defense also tried to make hay with Yanigisawa's testimony, using the phone records to show that Rajaratnam also received calls from Goldman equity salesman David Loeb. Loeb has not been accused of any wrongdoing but is under investigation, and Gupta's defense team has argued that Rajaratnam had many possible sources of insider information.
On the day prosecutors say Gupta told Rajartnam about the Berkshire deal, Loeb called former Galleon trader Adam Smith twice, including at 3:07 p.m., less than 45 minutes before Gupta is alleged to have tipped Rajaratnam. The logs also showed numerous other calls from Loeb to Rajaratnam and Smith, who has pleaded guilty in the case, including a total of four on Sept. 23, 2008, the day of the Berkshire deal.
Prior to Yanigisawa's testimony, former Galleon trader Isvari Mahedeva took the stand to tell the jury about Gupta's investment in Voyager Capital Partners, which he founded in 2005 with Rajaratnam and another man. Gupta invested a total of $10 million in the venture, but Mahedeva said she couldn't corroborate the defense's claim that he lost all of it.
Mahedeva said that Gupta and Rajartnam disagreed about the latter's share of the profit after Gupta doubled his investment in 2007. She said the dispute went on for "several months" before Rajaratnam in August 2008 agreed to give Gupta what he wanted, increasing Gupta's stake in Voyager by $4 million.
Mahedeva said Gupta met with Rajaratnam several times to discuss Voyager, but she did not know "what the tone of the conversation was."
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