NEW YORK (Reuters) – Former Goldman Sachs Group Inc (GS.N) board member Rajat Gupta will likely testify in his own defense at his insider trading trial, Gupta’s attorney said on Friday.
Defense lawyer Gary Naftalis said in Manhattan federal court after the jury had gone home for the week that his client might make the unusual move of giving his version of the case in which he is charged with illegally leaking boardroom secrets.
“It’s highly likely my client will testify,” Naftalis told U.S. District Judge Jed Rakoff.
Earlier on Friday, federal prosecutors wrapped up their leg of the case with a third and final day of testimony by their star witness — Goldman Sachs Chief Executive Lloyd Blankfein.
Gupta, 63, denies charges that he illegally divulged financial information to his one-time friend and business associate, hedge fund founder Raj Rajaratnam, between March 2007 and January 2009 while serving on the boards of Goldman and Procter & Gamble Co (PG.N).
Naftalis cautioned that Gupta may still change his mind about testifying and the judge said the defense must notify prosecutors in a timely way.
Rajaratnam, who was convicted last year and is now serving an 11-year prison term, opted not to testify in his own defense.
Gupta’s decision, while unusual, is not unprecedented in high profile white collar crime trials. Imprisoned chief executives like WorldCom’s Bernie Ebbers, Tyco’s TCY.N Dennis Kozlowski and Enron’s Jeffrey Skilling, each took the stand at their trials.
Gutpa’s trial began on May 21 and was scheduled to end on Friday, but it will instead continue into a fourth week.
Blankfein returned to the witness stand on Friday for a second straight day of cross-examination by Naftalis who quizzed the investment bank’s chief executive about how well Goldman guards company secrets.
Naftalis asked Blankfein about Goldman’s decision to cut its 32,500 workforce by 10 percent in October 2008 during the financial crisis. The Wall Street Journal reported the job cuts on October 23, 2008, before the employees who were being laid off knew about them, the jury heard.
“Unfortunately, a good number of people participated in the process and they did know,” said Blankfein.
The October 2008 job cuts are not in the indictment against Gupta. But part of the defense strategy is to argue that Rajaratnam, founder of the Galleon Group hedge fund, had many other sources of information to make stock trades other than Gupta.
Gupta is a retired global head of the McKinsey & Co consulting firm. His lawyers say he had nothing to gain financially by passing tips to Rajaratnam and that the government has a weak circumstantial and speculative case.
It is rare for a chief executive of a major corporation to testify in a criminal trial, but Blankfein has been called by the prosecution twice in the past 15 months. He also testified at Rajaratnam’s Manhattan federal court trial.
Neither Goldman nor Blankfein is accused of any wrongdoing in the case.
Blankfein calmly dealt with hours of questioning by Gupta’s defense attorney. The proceedings have been prolonged by numerous objections and conferences with the judge out of the hearing of the jury.
Under questioning by prosecutors, Blankfein has said several times either that all discussions at board meetings were confidential, or that he did not authorize Gupta to share information about the bank that was discussed at board meetings.
The case is USA v. Gupta, U.S. District Court for the Southern District of New York, No. 11-907.
(Editing by Andre Grenon, Bernard Orr)