Ex-McKinsey head Rajat Gupta had told his "close friend" Ajit Jain, chief of Berkshire Hathaway's reinsurance business, that he had been "swindled and cheated" by hedge fund founder Raj Rajaratnam when he lost his US$ 10 million in an investment fund.
India-born Jain, seen as a successor to Berkshire Hathaway's billionaire investor chief Warren Buffett, testified through video deposition as a defense witness in the insider trading trial of Gupta Friday.
Gupta's lawyer Gary Naftalis showed the jury in Manhattan federal court Jain's video depostion, which was recorded on May 27. In the video, Jain is seen sitting in a chair answering questions posed to him by Naftalis.
In the testimony, which came after the prosecution rested its case, Jain talks about a conversation Gupta had with him during a lunch in January 2009 at a restaurant in Stamford Connecticut.
"He (Gupta) told me, as best I can remember, that he had a 10 million investment with Rajaratnam in some venture and he had been gypped, swindled or cheated by Raj," Jain said.
"He lost his entire investment with Rajaratnam."
"So it wasn't just an issue of a bad investment," Naftalis asked. "Right," Jain said.
In response to a question by Naftalis, Jain said it was "unusual" for Gupta to share information about his investment with him.
Gupta's lawyers have argued in the case that he could not have shared secret boardroom information about Goldman Sachs and Proctor and Gamble with Rajaratnam since there was a falling out between the two when Gupta lost his investment.