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Flurry of arguments mark Gupta trial

world Updated: May 22, 2012 21:49 IST

Former Goldman Sachs director Rajat Gupta "threw away his duties" by divulging bank secrets to hedge fund manager Raj Rajaratnam, a US prosecutor said at the start of Gupta's insider-trading trial on Monday.

The defense punched back that the government had no direct evidence.

Gupta, 63, once a boldface name in business and charity circles, is the most prominent corporate executive charged in a US government crackdown on insider trading in recent years. Galleon Group founder Rajaratnam, an erstwhile friend and business associate of Gupta, was convicted of insider trading a year ago and is serving an 11-year prison term.

Gesturing with his left arm toward Gupta in a Manhattan federal courtroom, prosecutor Reed Brodsky said the case "is about this man" and "how he violated his duties and abused his position as a corporate insider."

During his turn at the podium, Gupta's lawyer Gary Naftalis painted a very different picture of Gupta, who was born in India and attended Harvard Business School before heading to McKinsey & Co management consultancy.

Naftalis repeatedly told the jury that there was "no real, hard, direct evidence" against him despite 10 months of FBI wiretaps on Rajaratnam's phones in 2008 and 2009.

"Rajaratnam had sources all over town giving him information. He even had sources at Goldman Sachs," Naftalis told the 12-member jury.

The trial is expected to last three to four weeks.

Goldman will play a key role at the trial. One of the government's core allegations is that Gupta tipped Rajaratnam to a $5 billion investment by Warren Buffett's Berkshire Hathaway Inc in Goldman during the 2008 financial crisis and Goldman's surprise fourth-quarter loss that year.