Rajat Gupta's lawyers say others tipped Rajaratnam

New York: Lawyers of Goldman Sachs’s former director Rajat Gupta, on trial for insider trading, have suggested that leaks from the bank to convicted hedge fund billionaire Raj Rajaratnam came from other sources and not Gupta.

As Joseph Yanagisawa, who works in Goldman Sachs’s technology unit, Wednesday testified about records of phone calls between Gupta’s office and Chief Executive Officer Lloyd Blankfein’s office, defence lawyer David Frankel confronted him with the logs of another executive.

[caption id=“attachment_335197” align=“alignleft” width=“380” caption=“Goldman Sachs’s former director Rajat Gupta. AFP”]  [/caption]

The logs showed more than two dozen calls between phones associated with David Loeb, Goldman Sachs’s head of Asia Equity Sales in New York, and Galleon Group co-founder Rajaratnam and others at Galleon.

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These included calls from Loeb’s phones to numbers associated with Rajaratnam and Galleon trader Adam Smith on dates when Gupta is alleged to have tipped Rajaratnam, bolstering a defence claim that it was Loeb or others who leaked data.

Prosecutors say that within seconds of hanging up from the board meeting on 23 September 2008, Gupta tipped Rajaratnam at around 3.55 pm about Berkshire Hathaway’s $5 billion investment in Goldman Sachs.

Earlier, an Indian-American witness testified that Gupta stood to profit from investments he made in funds managed by Rajaratnam, but conceded she had “no information,” whether Gupta actually profited or if he got back his $10 million investment.

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Isvari Mahadeva, former Galleon portfolio manager said the fund firm’s records showed Rajaratnam, Gupta and a third money manager, Ravi Trehan, formed Voyager Capital Partners in 2005, with Gupta contributing $5 million.

She said that in 2007 Gupta had an option to invest an additional $5 million that could reap 10 percent in additional profit.

“I was told he chose to exercise the option,” said Mahadeva, who worked for Galleon for 12 years until Rajaratnam was arrested in October 2009.

IANS