Goldman Sachs CEO Lloyd Blankfein, told jurors at the insider-trading trial of one of the investment bank’s former directors that all parts of meetings of the board were “confidential”.
“All parts of it,” said Blankfein, when asked about a June 2008 board meeting in St. Petersburg, Russia, that he and defendant Rajat Gupta both attended.
The meeting had no direct bearing on the trial but was used by prosecution to show Gupta violating the confidentiality of these meetings.
In an FBI wiretap on convicted Galleon owner Raj Rajaratnam’s phone, he is heard discussing the outcome of a Goldman Sachs meeting with Gupta. In the taped conversation Rajaratnam asks Gupta about a rumour that Goldman Sachs was buying a commercial bank. “This was a big discussion at the board meeting,” answered Gupta.
Goldman never bought that bank and Rajaratnam did not benefit from this conversation.
Rajaratnam, whom Gupta is accused of tipping with some of Goldman’s most guarded secrets, was convicted in 2011 of insider trading, and sentenced to 11 years in jail.
Gupta, a former McKinsey managing director, faces a lesser sentence if found guilty.
The Galleon CEO and Gupta also discussed another topic that figured at the Goldman Sachs board meeting — a proposal to buy insurance giant AIG. Goldman didn’t buy AIG, and Rajaratnam did not profit from it as well.
Gupta is accused of tipping off Rajaratnam about a $ 5 billion investment into Goaldman Sachs.
As a director at P&G, Gupta allegedly passed on to Rajaratnam advance information about negative earnings through a phone call after a telephonic conference of the company’s board.
Gupta’s defense has focussed on, one, showing he was not as close to Rajaratnam as has been made out to be and, two, most government witnesses as coached bounty hunters.