Gupta did not pass insider tips to Rajaratnam: defence

Betwa Sharma
New York, Apr 22 (PTI) In its closing arguments in the
largest hedge fund insider trading case in US history, the
defence has denied allegations that former Goldman Sachs Inc
director Rajat Gupta passed insider tips to Galleon Group
founder and main accused Raj Rajaratnam.
John Dowd, Rajaratnam's lawyer, asked the jury why
Gupta, 62, would risk his entire career and reputation for
nothing.
"Rajat Gupta did not receive anything. Rajaratnam did
not give him anything," Dowd said.
During the rebuttal, US Attorney Jonathan Streeter
said out that Gupta was an investor in Galleon's GB Voyager
Multi-Strategy Fund, a fund that included assets from other
Galleon funds.
"He stood to benefit if Raj makes more money," he
said.
Streeter told the jury that Judge Richard Holwell in
his legal directions would tell them that benefits do not
always have to be tangible but could also include making
useful contacts or a favour returned down the road.
Rajaratnam, 53, who has been charged with 14 counts of
securities fraud and conspiracy, has maintained his denial of
wrongdoing.
If convicted, he faces up to 20 years in prison.
Out of the 26 people arrested in the case, 19 have
pleaded guilty.
Gupta, has not been charged in the criminal case but
faces civil charges from the US Securities and Exchange
Commission for allegedly passing confidential information
about Goldman Sachs to the defendant.
These include telling Rajaratnam in July 2008 that
Sachs was considering acquiring a commercial bank, an alleged
tip on a USD 5 billion investment in the firm by Warren
Buffett's Berkshire Hathaway in September 2008, and allegedly
disclosing in October 2008 that Goldman Sachs was losing USD 2
on each share, which led Rajaratnam into selling the firm's
stock.
Dowd insisted that Gupta had not breached Goldman's
confidentiality agreement but Streeter shot back, saying that
Lloyd Blankfein, CEO of the firm, had testified that Gupta had
broken the rules.
Rajaratnam's trading, Dowd said, was based on public
information and the secretly recorded phone calls between
Gupta and Rajaratnam, which the prosecution previously played,
had been taken out of context.
The defense lawyer said that US government's Troubled
Asset Relief Program, commonly referred to as TARP, had been
good for the financial sector and Blankfein had testified that
TARP had benefitted Goldman Sachs more than Buffet's
investment.
Streeter reiterated that while Rajaratnam may have had
public information, the defendant's trades were based on the
extra edge of alleged insider information.
The government rebuttal will continue on Monday.