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Hope Rajat is not in trouble..
« on: April 16, 2010, 10:59:02 AM »

From WSJ..

Goldman Director Gupta to Leave

Galleon Case Figure Relayed His Decision in March After Notification of U.S.


Rajat Guptatold Goldman Sachs Group Inc. in March he wouldn't stand for re-election as a director, after receiving notice from prosecutors that they were reviewing recorded conversations between him and Galleon Group founder Raj Rajaratnam, people close to the matter say.

Complete CoverageNews Hub: Analysis on Galleon Case WSJ Topics: The Galleon Group .
Mr. Gupta, a Goldman director since 2006, said through a spokesman that his decision to step down was because of "other commitments."

The U.S. has charged Mr. Rajaratnam and 20 others in a wide-ranging insider-trading case. Mr. Rajaratnam is fighting the charges; 11 others have pleaded guilty in the case, which is continuing.

Goldman declined to say whether Mr. Gupta told the firm about the government notification. Mr. Gupta is in India and unavailable for comment, a spokesman said. Mr. Rajaratnam declined to comment.

As reported by The Wall Street Journal on Thursday, prosecutors are examining whether Mr. Gupta gave insider information about the big banking firm to Mr. Rajaratnam during the height of the financial crisis.

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Agence France-Presse/Getty Images Rajat Gupta, in January at a World Economic Forum session, has been notified by the government that his conversations were intercepted.
Mr. Gupta, 61 years old, is one of a number of individuals who received letters from the government saying their conversations had been intercepted in phone calls through wiretaps and consensual recordings made by witnesses in the case.

No criminal charges or allegations have been filed against Mr. Gupta, nor is there any indication investigators are looking at his own stock trading. A spokesman said: "Mr. Gupta is unaware of any examination of any such issue and has done nothing wrong."

Mr. Gupta has served on the board's audit, compensation, corporate-governance and nominating committees. His term as a Goldman director ends in May.

In a March 19 release about Mr. Gupta's decision, Goldman Chief Executive Lloyd Blankfein said: "Rajat has made important contributions to Goldman Sachs as a board member," adding that "his independent advice, keen understanding of the issues and belief in our culture has had a tremendous impact on our firm."

Mr. Gupta had told Goldman in September 2008 that he didn't want to stand for re-election to its board but that Goldman officials persuaded him to remain in the post because of the turmoil in the markets, according to Mr. Gupta's spokesman. Goldman declined to comment.

In a March 22, 2010, court filing, the government told Mr. Rajaratnam's lawyers that its investigation was continuing and that it anticipates its "review of information will lead to further evidence relating to the charged crimes, including identification of additional uncharged co-conspirators."

In the filing, the government listed Goldman among 22 stocks in which it said it was scrutinizing trades by Mr. Rajaratnam and others involved in the case. The government said it was focusing on trades in shares of Goldman between June 2008 and October 2008, the height of the financial crisis, when the Wall Street firm's shares were gyrating because of fears about the prospects for the banking business.

WSJ ProfessionalGovernments Target Insider Trading Dow Jones Business News: Trial Begins in 'Kiss' Case .
The Galleon case hinges on evidence gathered by the government through wiretapped and consensually recorded phone calls. How the government proceeds against Mr. Gupta, if at all, likely would depend on the nature of the recordings. The details of the communication between Messrs. Rajaratnam and Gupta that was intercepted by the U.S. couldn't be determined.

The Indian-born Mr. Gupta was a close associate of Mr. Rajaratnam; the two were in a business partnership several years ago. Mr. Gupta visited Galleon's offices frequently, and he was invited to attend Galleon parties, people close to the situation say.

Mr. Gupta was head of consulting firm McKinsey & Co. from 1994 to 2003 and remained at the firm until 2007; he also sits on the board of AMR Corp. and Procter & Gamble Co. There is no indication that trading in shares of either of those companies is being scrutinized by the government.
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Re: Hope Rajat is not in trouble..
« Reply #1 on: April 17, 2010, 09:27:41 AM »

hahaha my friend sitting next to me is from goldman
In the attitude of silence the soul finds the path in a clearer light, and what is elusive and deceptive resolves itself into crystal clearness. Our life is a long and arduous quest after Truth.
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Re: Hope Rajat is not in trouble..
« Reply #2 on: April 23, 2010, 04:09:47 AM »

More details..

Rajat may provided info to Rajaratnam..
From WSJ

Probe Turns to Buffett Deal
Government Suspects Goldman Director Told Galleon of Berkshire's 2008 Investment.By SUSAN PULLIAM

A Goldman Sachs Group Inc. director tipped off a hedge-fund billionaire about a $5 billion investment in Goldman by Warren Buffett's Berkshire Hathaway Inc. before a public announcement of the deal at the height of the 2008 financial crisis, a person close to the situation says.

The revelation marks a significant turn in the government's case against Raj Rajaratnam, the hedge-fund titan at the center of the largest insider-trading case in a generation. Mr. Buffett's investment in Goldman in September 2008 was a watershed moment in the financial crisis. One of the world's savviest investors, Mr. Buffett helped allay fears about the instability of the financial system by backing America's leading investment bank.

The new disclosure stems from a government examination into whether the Goldman director, Rajat Gupta, gave inside information to Mr. Rajaratnam. In a court filing March 22, the government alleged that Mr. Rajaratnam or "co-conspirators" traded on non-public information about Goldman. In a filing last week, the government provided more details about the information it alleges Mr. Rajaratnam received, including advance notice about the Buffett transaction with Goldman.

That information came from Mr. Gupta, a person familiar with the matter says. Federal prosecutors notified Mr. Gupta in a letter that they had intercepted phone conversations between him and Mr. Rajaratnam. Mr. Gupta told Goldman last month he wouldn't seek re-election as a director.

Mr. Gupta hasn't been charged in the case, and denies any wrongdoing in the matter. The government's examination of him was first reported last week in The Wall Street Journal. Mr. Rajaratnam, founder of the Galleon Group hedge fund, is fighting criminal insider-trading charges in the case. He declined to comment on any discussions with Mr. Gupta. Goldman also declined to comment.

"Rajat has neither violated any law nor done anything else improper. He has always conducted himself with integrity in his business, philanthropic and personal life," says Mr. Gupta's lawyer, Gary Naftalis. A spokeswoman for the U.S. Attorney's office declined to comment.

The Buffett investment buoyed Goldman's shares. In the days leading up to the deal, the firm's stock had slid more than 40%—to $86 intraday on Sept. 18. By the time the deal was announced, on Sept. 23, its shares surged 45% to $125. On Thursday, Goldman's shares were up 12 cents to $159.05.

The investment, preferred shares in Goldman paying a 10% dividend, has been lucrative for Mr. Buffett: Berkshire has reaped profits totaling $750 million.

In papers filed in a New York federal court late last week, the government disclosed for the first time details about inside information Mr. Rajaratnam allegedly obtained regarding Goldman. Prosecutors said this included non-public information about the Berkshire investment in Goldman in September 2008, as well as Goldman earnings before their release to the public between June and September 2008, a time of market tumult.

Mr. Gupta wasn't mentioned in the filing. A person familiar with the matter says that Mr. Gupta spoke with Mr. Rajaratnam about the non-public data regarding Berkshire. Goldman has made no public disclosures about the U.S. notification received by Mr. Gupta in the insider-trading probe.

The firm says Mr. Gupta will remain on as a director until next month, when his term ends. Since 2006, he has received a total of $1.7 million in compensation as a Goldman director. Goldman's in-house lawyers interviewed Mr. Gupta about the matter, and he denied wrongdoing, a person familiar with the matter says.

Mr. Gupta didn't participate in a Goldman board meeting this Monday after the Securities and Exchange Commission charged the firm in a separate civil case with fraud over a derivatives deal it arranged; Goldman denies wrongdoing in the SEC case.

Mr. Rajaratnam is one of 21 people who have been charged in the Galleon insider trading case. Of those, 11 have pleaded guilty while Mr. Rajaratnam and former hedge fund consultant, Danielle Chiesi, have vowed to fight the charges.

Mr. Gupta was told by prosecutors in a letter that his conversations with Mr. Rajaratnam were intercepted through wiretap recordings by the government of Mr. Rajaratnam's phones. It couldn't be determined whether wiretap recordings include discussion between Mr. Gupta and Mr. Rajaratnam of the Berkshire investment. Such wiretap recordings are at the center of the government's case against Mr. Rajaratnam.

Under the federal statute governing wiretaps by the government, prosecutors send letters to some of the individuals whose conversations are captured in the recordings. Not everyone who turns up on the government's recordings receives such a letter, however, unless the conversation in question is of interest to the government.

In order to bring charges against Mr. Gupta, prosecutors would need to believe that they could prove that Mr. Gupta knowingly provided Mr. Rajaratnam with inside information. Mr. Gupta, 61 years old, and Mr. Rajaratnam were close associates and once had a business partnership together. They met frequently, sometimes several times a month, at Galleon's midtown Manhattan offices, people familiar with the matter say. Mr. Gupta was invited to attend parties hosted by Galleon, one of those people says.

Mr. Gupta was head of consulting firm McKinsey & Co. from 1994 to 2003 and remained at the firm until 2007; he also sits on the board of AMR Corp. and Procter & Gamble Co. There is no indication that trading in shares of either of those companies is being scrutinized by the government. McKinsey, AMR and Procter & Gamble declined to comment.

The exact nature of the conversation between Mr. Gupta and Mr. Rajaratnam couldn't be determined. Goldman declined to comment on when its board was notified about the Buffett transaction.

In the weekend leading up to the 2008 Buffet deal, Goldman Chief Executive Lloyd Blankfein, co-presidents Gary Cohn and Jon Winkelried, Chief Financial Officer David Viniar and others discussed ways to raise capital. They zeroed in on Mr. Buffett. His Goldman broker, Byron Trott, who has since left Goldman, called Mr. Buffett, asking him what it would take to get him to do a deal, says a person close to the situation.

Mr. Buffett responded that he wanted preferred shares with a 10% dividend and warrants. By the time the market closed that day, Sept. 23, 2008, Mr. Buffett's deal had been nailed down.

Goldman, meanwhile, worked the phones to sell an additional $5 billion in common stock to other investors. The two deals—$5 billion from investors and the $5 billion preferred stock investment—from Mr. Buffett were announced that day, helping set the stage for a powerful recovery for both Goldman and the financial world.

—Susanne Craig contributed to this article.
Write to Susan Pulliam at susan.pulliam@wsj.com

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