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

UN Ambassador Power Highlights Plight of Women Prisoners

She launches the 'Free the 20' campaign, aimed at profiling women being deprived of their freedom around the world More

Satellite Launch Sparks Spectacular Light Show

A slight delay in a satellite launch lit up the Florida sky early this morning More

Fleeing IS Killings in Syria, Family Reaches Bavaria

Exhausted, scared and under-nourished, Khalil and Maha's tale mirrors those of thousands of refugees from war-torn countries who have left their homes in the hopes of finding a better life 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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs