Email, wiretaps, at trial link Gupta to Rajaratnam
By Grant McCool
NEW YORK (Reuters) - Using FBI wiretaps, email, phone records and the testimony of a Goldman Sachs Group Inc (GS.N: Quote) director, U.S. prosecutors drew a picture for jurors on Thursday of events that led to the insider-trading trial of onetime corporate star Rajat Gupta.
The 63-year-old Gupta is accused of providing now-imprisoned hedge fund manager Raj Rajaratnam with boardroom secrets between March 2007 and January 2009 while he was a director of Goldman Sachs and Procter & Gamble Co (PG.N: Quote).
Gupta, also onetime head of McKinsey & Co management consultancy, is the most prominent corporate figure indicted in a broad U.S. government crackdown on insider trading in recent years in which dozens have been convicted. He denies the charges and says prosecutors have no direct evidence.
On the fourth day of Gupta's trial in Manhattan federal court, William George, a Goldman board member since 2002, affirmed on the witness stand that the investment bank's policy prohibited discussion of board meetings with outsiders.
He confirmed that a June 28, 2008 board meeting at the Hotel Astoria in St Petersburg, Russia, had included discussion of Goldman possibly acquiring a commercial bank. Rajaratnam and Gupta were recorded on a wiretap a month later talking about it, but that is not included in the indictment.
In one of the six charges, prosecutors contend that Gupta tipped Rajaratnam, in an illegal breach of his fiduciary duties, about a deal on September 23, 2008 that gave Goldman a $5-billion boost from renowned investor Warren Buffet's Berkshire Hathaway Inc (BRKa.N: Quote) when markets were in crisis.
One of the government's next witnesses on Friday or early next week will be former McKinsey manager Anil Kumar, who was once friends with both Gupta and Rajaratnam. Kumar pleaded guilty to criminal charges and testified against the hedge fund manager at his trial a year ago.
PHONE RECORDS Continued...