Goldman Sachs CEO Takes The Stand (GS, BRK)
Goldman Sachs (NYSE: GS) CEO Lloyd Blankfein took the stand at Galleon Group co-founder Raj Rajaratnam's insider-trading trial today. Blankfein testified for the prosecution, asserting that Rajat Gupta violated policies when he revealed confidential information from Goldman Sachs' business plans.
Blankfein was called to make the case that Rajaratnam traded based upon confidential information obtained from Gupta about Goldman Sachs' plans future plans. Specifically, Blankfein was asked about a conversation recorded on July 29, 2008. In this conversation, Gupta shared with Rajaratnam plans for Goldman Sachs to acquire either a commercial bank or an insurance company. The prosecution needed to make it clear to the jury that Gupta was sharing confidential information, thus proving that the trade Rajaratnam made based on this information was an inside trade.
Blankfein asserted that Gupta was not authorized to confirm or deny rumors, and Gupta was in violation of Goldman Sachs policies.
Gupta is currently being investigated by the SEC. Rajaratnam's lawyer has said he will not be questioning Blankfein regarding any ongoing investigations involving Goldman Sachs.
Allegedly, Gupta received news of a $5 billion investment in Goldman Sachs (NYSE: BRK) by Berkshire Hathaway, and immediately called to share the news with Rajaratnam. Rajaratnam bought shares based upon this information.
