Posted: 11:25a.m. IST, May 24, 2012
New York, May 24 (IANS) Prosecutors played the lone recorded phone call of Rajat Gupta to Raj Rajaratnam to show the close relationship of Goldman Sachs' former Indian American director with the convicted billionaire hedge fund founder.
The recording was played in Manhattan federal court on the third day of Gupta's trial on insider trading charges in a bid to show how easily Gupta shared information about Goldman board meetings with his friend.
During the 24-minute call July 29, 2008, Gupta told Rajaratnam there was a 'big discussion' at a Goldman board meeting about whether the financial firm should buy a commercial bank. He said the board was divided on the subject.
Gupta also seemed to be seeking a role with Rajaratnam's Galleon Group hedge funds, saying: 'By the way, on that I want you to keep, us to keep having the dialogue as to what ... you know, how I can be helpful in Galleon International. By the way not Galleon International, Galleon Group.'
The call came a month and a half before prosecutors say Gupta telephoned Rajaratnam seconds after learning that Warren Buffet was investing $5 billion in Goldman at the height of the financial crisis, but they contend the recording shows their relationship.
Records show Gupta placed a call to Rajaratnam immediately after the Goldman board meeting Sep 23, 2008, although there is no recording of what was said.
Defence lawyers argued that everything Gupta discusses on the call was already publicly spoken about by top Goldman executives.
They say Gupta's relationship with Rajaratnam had soured significantly by September 2008 as he lost $10 million in a shared investment with Rajaratnam.
Earlier in the day, former Goldman partner Byron Trott told jurors that the deal with Buffett was 'as top secret as you could get'.
In cross-examination, Gupta's lawyer Gary Naftalis suggested that plans at that time for emergency US government assistance to banks, under the programme known as TARP, could have prompted Rajaratnam to buy Goldman stock, rather than a tip-off about Buffet.
'Goldman Sachs got $10 billion (from TARP), is that correct?' he asked Trott. 'Twice what Mr Buffet's investment was, right?'
Trott replied that the TARP deal was only in the planning stages on that day and 'I don't think anybody did, honestly, know about TARP.'