News / USA

Testimony Begins in US Insider Trading Trial

Rajat Gupta, a former Goldman Sachs Group Inc. and Procter & Gamble board member, arrives at the Manhattan Federal Court in New York May 22, 2012.
Rajat Gupta, a former Goldman Sachs Group Inc. and Procter & Gamble board member, arrives at the Manhattan Federal Court in New York May 22, 2012.
Carolyn Weaver
NEW YORK -  The first witnesses have testified in the insider trading trial of Rajat Gupta, a former head of the global consulting firm McKinsey & Company, who is alleged to have engaged in insider trading while serving on the boards of Goldman Sachs Group and Procter & Gamble.

Federal prosecutors allege that Gupta telephoned a friend and investment partner, Raj Rajaratnam, seconds after a Goldman Sachs board meeting in September 2008 - to tell him that investor Warren Buffett was about to invest $5 billion in the company.

Rajaratnam's former subordinates at his Galleon Group hedge fund testified that he ordered a buy of thousands of shares of Goldman Sachs as soon as he finished the call - which phone company records showed was from Gupta's office.

Rajaratnam sold the shares for a profit of $1 million the next day, when the news of Buffett’s investment became public.  He is now serving an 11-year prison term following his conviction in 2011 on 14 counts of insider trading.

The Indian-born Gupta has denied all six counts against him.  His defense attorneys say that other top Goldman Sachs officials who were close to Rajaratnam might have been the source of the inside information.
 
Prosecutors do not accuse Gupta of profiting from the alleged crimes.

Gupta's friends say he had no motive to help Rajaratnam, and that he had other reasons to be in frequent touch - because he had invested with him, and as a philanthropist associated with the Global Fund to fight AIDS, Tuberculosis and Malaria, and other charities.

"There are thousands of facts, of which the government has picked half a dozen, and said these are proximate, therefore they are related," said Atul Kanagat, a former colleague of Gupta's who is attending the trial and speaking out in his defense. "But if you put the entire picture together, you're going to see that Rajat used to make thousands of calls and hundreds of calls to Rajaratnam, they just picked the ones that happened to fall at the same time as trades - and voila."

Gupta is also charged with enabling other illegal and profitable trades by tipping Rajaratnam weeks later that Goldman Sachs was about to report an unexpected decline - and with information about Procter & Gamble.

In opening statements, Gupta's defense attorneys told the jury that the government lacks any direct evidence - and that the case is "based on speculation, guesswork and suspicion."

If convicted, Gupta faces up to 25 years in prison.

Other leading business figures, including Buffett and Goldman Sachs head Lloyd Blankfein, may also be called to testify in the trial, which is expected to last about three weeks.

You May Like

Video For West Ukraine City, Conflict Far Away Yet Near

Physically and culturally close to Western Europe, Lviv feels solidarity with compatriots in country’s east but says they need to decide own future More

West African Women Disproportionately Affected by Ebola

Women's roles in families and the community put them at greater risk for contracting the disease, officials say More

Video NASA's MAVEN Spacecraft Arrives at Mars

Mars Atmosphere and Volatile Evolution craft will measure rates at which gases escape Martian atmosphere into space More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA’s MAVEN Probe Enters Mars Orbiti
X
September 22, 2014 9:20 PM
NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid