NEW YORK TIMES
Goldman C.E.O. Could Testify in Galleon TrialBy PETER LATTMAN and SUSANNE CRAIG
Mr. Blankfein has agreed to testify for the government in the trial of Mr. Rajaratnam, a founder of the Galleon Group hedge fund, according to a person with direct knowledge of the case who spoke only on the condition of anonymity. Mr. Rajaratnam’s trial is scheduled to start on Tuesday in
Federal prosecutors could call Mr. Blankfein as a witness to discuss his conversations with Rajat K. Gupta, a former Goldman director who on Tuesday was accused by the Securities and Exchange Commission of passing along confidential information about the bank to Mr. Rajaratnam.
There is, however, no guarantee that Mr. Blankfein will be called.
The government has numerous cooperating witnesses and scores of wiretapped conversations that it has said it plans to use against Mr. Rajaratnam.
But should Mr. Blankfein take the witness stand, it would add to the already intense attention surrounding the high-profile trial.
Mr. Rajaratnam is the central figure in the government’s vast investigation into insider trading on Wall Street. Federal authorities arrested Mr. Rajaratnam in October 2009 and charged him with securities fraud and conspiracy.
Mr. Blankfein, 56, may not be the only Goldman executive to testify.
In a letter filed with the court on Thursday, John Dowd, a lawyer for Mr. Rajaratnam, said that executives from Goldman and Procter & Gamble, where Mr. Gupta is a former director, could testify at the trial. The government also accused him of providing Mr. Rajaratnam with illegal tips about P.&G.
“The government’s witness list includes numerous Goldman Sachs and Procter & Gamble representatives who will presumably provide testimony on the very issues in the S.E.C lawsuit,” the letter says.
Were Mr. Blankfein to testify, he would likely discuss his conversations with Mr. Gupta that are at the center of the S.E.C.’s civil action against Mr. Gupta.
In one instance, the S.E.C. claims that Mr. Gupta discussed with Mr. Rajaratnam confidential information about Goldman’s earnings results for the fourth quarter of 2008. After a board call during which Mr. Blankfein and David Viniar, the chief financial officer, previewed the bank’s awful quarter for the directors, Mr. Gupta is said to have hung up the phone and called Mr. Rajartnam 23 seconds later.
The next morning, the S.E.C. says, Galleon funds sold their Goldman holdings, avoiding losses of more than $3 million.
Among the other Goldman tips that the S.E.C. says Mr. Gupta provided to Mr. Rajaratnam was word that Warren E. Buffett would invest $5 billion in the bank in September 2008 as the financial crisis raged.
Gary Naftalis, a lawyer for Mr. Gupta, has said that the S.E.C. accusations are “totally baseless” and that his client didn’t trade in either Goldman or P.&G. and didn’t share in any profits with Mr. Rajaratnam.
The Wall Street Journal reported earlier that Mr. Blankfein might be called as a witness.
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