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| Raj Rajaratnam |
The prosecution narrative is that Rajat Gupta, a Goldman board member and former head of the McKinsey consulting firm, gave inside information about earnings to Rajaratnam in 2008. Gupta allegedly passed the information to Rajaratnam immediately after Blankfein concluded a conference call on the topic with Goldman’s directors. Blankfein, not accused of any wrongdoing, could testify that the call was the source of the information.
Profitable Tip
The tip was lucrative, to the tune of $1 million in trading profits for Galleon Group. The leak has prompted the Securities and Exchange Commission to file a lawsuit against Gupta. Rajaratnam’s lawyers argue that the Gupta lawsuit jeopardizes their own case, in which Gupta was to be called by the defense. The lawyers also complained about pre-trial publicity polluting the jury pool – not an unusual tactic in high-profile trials.
"It is simply inexplicable that they did not act to stop this pollution of this jury pool," lead defense lawyer John Dowd said of prosecutors. "One is left to conclude this was a deliberate attempt to pollute this jury pool and deny Mr. Rajaratnam his right to an impartial jury."
Gupta Claims Innocence
Gupta has denied wrongdoing in a recent email. "There are no tapes or any other direct evidence of me tipping Mr. Rajaratnam," Gupta wrote. "I did not trade any of the securities involved, nor did I share in any of Mr. Rajaratnam's profits."
