Blankfein says did not OK Gupta to share board info

Thu Jun 7, 2012 7:17pm EDT
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By Basil Katz

NEW YORK (Reuters) - The chief executive of Goldman Sachs Group Inc told a federal court jury on Thursday that he did not authorize former board member Rajat Gupta to share information about the bank that was discussed at board meetings.

Goldman CEO Lloyd Blankfein returned to the witness stand for a second day, smiling broadly as he strode into the courtroom, to testify for the prosecution at Gupta's insider-trading trial.

Gupta, who sat on the Goldman board of directors until 2010, is fighting charges in U.S. District Court in Manhattan that he leaked inside information about the bank to now-imprisoned hedge-fund manager Raj Rajaratnam. Gupta faces a possible 25-year prison sentence if he is convicted on the charges of securities fraud and conspiracy.

Prosecutors contend that Gupta called into a March 12, 2007 meeting of Goldman's audit committee from the offices of Rajaratnam's Galleon Group. Minutes after the call ended, the government says, Gupta told Rajaratnam about Goldman's first-quarter 2007 earnings. The results were not publicly announced until the following day.

"Did you authorize Mr. Gupta on March 12, 2007, to disclose any information learned during that audit committee meeting to any outsider prior to it being public?" asked prosecutor Reed Brodsky.

"No," Blankfein answered in a firm voice. Neither Goldman nor Blankfein is accused of any wrongdoing in the case.

Prosecutors say Gupta, 63, illegally leaked confidential information to Rajaratnam between March 2007 and January 2009 while serving on the boards of Goldman and Procter & Gamble.

Lawyer Gary Naftalis, who questioned Blankfein for the defense, sought to establish that Gupta was a valued and trusted Goldman board member.   Continued...

Goldman Sachs Chairman and Chief Executive Lloyd Blankfein smiles as he walks towards the Manhattan federal court in New York June 7, 2012. REUTERS/Andrew Kelly